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6560-50-P

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2009-0597; FRL-xxxx-x]

RIN 2060-AP87

Prevention of Significant Deterioration (PSD): 

Reconsideration of Interpretation of Regulations that 

Determine Pollutants Covered by the Federal PSD Permit 

Program

AGENCY: Environmental Protection Agency.

ACTION: Notice of Interpretation.

SUMMARY: EPA has made a final decision to continue 

applying the Agency’s existing interpretation of a 

regulation that determines the scope of pollutants subject

to the federal Prevention of Significant Deterioration 

(PSD) program under the Clean Air Act (CAA or Act). In a 

December 18, 2008 memorandum, EPA established an 

interpretation clarifying the scope of the phrase “subject 

to regulation” found within the definition of the term 

“regulated NSR pollutant.” After considering comments on 

alternate interpretations of this term, EPA has decided to 

continue to interpret it to include each pollutant subject 

to either a provision in the CAA or regulation adopted by 

EPA under the CAA that requires actual control of emissions 

of that pollutant. Thus, this notice explains EPA will 
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continue following the interpretation in the December 18, 

2008 memorandum with one exception. EPA is refining its

interpretation to establish that the PSD permitting 

requirements will not apply to a newly regulated pollutant 

until a regulation requiring actual control of emissions of 

that pollutant “takes effect.” In addition, this notice

addresses several questions regarding the applicability of 

the PSD and Title V permitting programs to greenhouse gases 

(GHGs) upon the promulgation of EPA regulations 

establishing limitations on such pollutants from vehicles 

under Title II of the CAA. Collectively, these conclusions 

result in an EPA determination that PSD and Title V 

permitting requirements will not apply to GHGs until at 

least January 2, 2011.

FOR FURTHER INFORMATION CONTACT: Mr. David Svendsgaard, 

Air Quality Policy Division (C504-03), U.S. Environmental 

Protection Agency, Research Triangle Park, NC 27711, 

telephone number: (919) 541-2380; fax number: (919) 541-

5509, e-mail address: svendsgaard.dave@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me? 

Entities potentially affected by this action include 

sources in various industry groups and state, local, and 
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tribal governments.

B. How is this preamble organized?

The preamble is organized as follows:

I. General Information

II. Background

III. This Action

A. Overview

B. Analysis of Proposed and Alternative 

Interpretations for Subject to Regulation

1. Actual Control Interpretation

2. Monitoring and Reporting Interpretation 

3. State Implementation Plan (SIP) Interpretation 

4. Endangerment Finding Interpretation 

5. Section 209 Waiver Interpretation 

C. Other Issues On Which EPA Solicited Comment

1. Prospective Codification of Interpretation

2. Section 821 of the Clean Air Act Amendments of 

1990

3. Timing of When a Pollutant becomes Subject to 

Regulation

IV. Application of PSD Interpretive Memo to Permitting for 

GHGs

A. Date by Which GHGs Will Be “Subject to Regulation”

B. Implementation Concerns

C. Interim EPA Policy to Mitigate Concerns Regarding 

GHG Emissions from Construction or Modification of 

Large Stationary Sources

D. Transition for Pending Permit Applications

V. PSD Program Implementation by EPA and States

VI. Application of the Title V Program to Sources of GHGs

VII. Statutory Authority

II. Background

On December 18, 2008, then-EPA Administrator Stephen 

Johnson issued a memorandum setting forth EPA’s

interpretation regarding which pollutants were “subject to 

regulation” for the purposes of the federal PSD permitting 

program. Memorandum from Stephen Johnson, EPA 
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Administrator, to EPA Regional Administrators, RE: EPA’s 

Interpretation of Regulations that Determine Pollutants 

Covered by Federal Prevention of Significant Deterioration 

(PSD) Permit Program (Dec. 18, 2008) (“PSD Interpretive 

Memo” or “Memo”); see also 73 FR 80300 (Dec. 31, 2008) 

(public notice of Dec. 18, 2008 memo). The Memo interprets 

the phrase “subject to regulation” to include pollutants 

“subject to either a provision in the CAA or regulation 

adopted by EPA under the CAA that requires actual control 

of emissions of that pollutant,” while excluding pollutants 

“for which EPA regulations only require monitoring or 

reporting.” See Memo at 1. The Memo was necessary after 

issues were raised regarding the scope of pollutants that 

should be addressed in PSD permitting actions following the 

Supreme Court’s April 2, 2007 decision in Massachusetts v. 

EPA, 549 U.S. 497 (2007). 

In Massachusetts v. EPA, the Supreme Court held that 

GHGs, including carbon dioxide (CO2), are air pollutants 

under the CAA. The case arose from EPA’s denial of a 

petition for rulemaking filed by more than a dozen 

environmental, renewable energy, and other organizations 

requesting that EPA control emissions of GHGs from new 

motor vehicles under section 202 of the CAA. The Court 

found that, in accordance with CAA section 202(a), EPA was 
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required to determine whether or not emissions of GHGs from 

new motor vehicles cause or contribute to air pollution 

which may reasonably be anticipated to endanger public 

health or welfare, or whether the science is too uncertain 

to make a reasoned decision.1 

On November 13, 2008, the Environmental Appeals Board 

(EAB) issued a decision in a challenge to a PSD permit to 

construct a new electric generating unit in Bonanza, Utah. 

In re Deseret Power Electric Cooperative, PSD Appeal No. 

07-03 (EAB Nov. 13, 2008) (“Deseret”). The permit was 

issued by EPA Region VIII in August 2007 and did not 

include best available control technology (BACT) limits for 

CO2. At the time, the Region acknowledged Massachusetts but 

found that decision alone did not require PSD permits to 

include limits on CO2 emissions. In briefs filed in the EAB

case, EPA maintained the position that the Agency had a 

binding, historic interpretation of the phrase “subject to 

regulation” in the federal PSD regulations that required 

PSD permit limits to apply only to those pollutants already 

subject to actual control of emissions under other 

provisions of the CAA. Response of EPA Office of Air and 

Radiation and Region VIII to Briefs of Petitioner and 

 

1 On December 15, 2009, EPA finalized endangerment and cause 

or contribute findings for GHGs under the CAA. See 74 FR 

66495. 
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Supporting Amici (filed March 21, 2008). Accordingly, EPA 

argued that the regulations contained in 40 CFR Part 75, 

which require monitoring of CO2 at some sources, did not 

make CO2 subject to PSD regulation. The order and opinion 

issued by the EAB remanded the permit after finding that 

prior EPA actions were insufficient to establish a 

historic, binding interpretation that “subject to 

regulation” for PSD purposes included only those pollutants 

subject to regulations that require actual control of 

emissions. However, the EAB also rejected arguments that 

the CAA compelled only one interpretation of the phrase 

“subject to regulation” and found “no evidence of a 

Congressional intent to compel EPA to apply BACT to 

pollutants that are subject only to monitoring and 

reporting requirements.” Thus, the Board remanded the 

permit to the Region to “reconsider whether or not to 

impose a CO2 BACT limit in light of the ‘subject to 

regulation’ definition under the CAA.” The Board 

encouraged EPA to consider “addressing the interpretation 

of the phrase ‘subject to regulation under this Act’ in the 

context of an action of nationwide scope, rather than 

through this specific permitting proceeding.” See Deseret

at 63-64. 
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EPA issued the PSD Interpretive Memo shortly after the 

Deseret decision with the stated purpose to “establish[] an 

interpretation clarifying the scope of the EPA regulation 

that determines the pollutants subject to the federal 

Prevention of Significant Deterioration (PSD) program under 

the Clean Air Act (CAA or Act)” by providing EPA’s 

“definitive interpretation” of the definition of the term 

“regulated NSR pollutants” found at 40 CFR 52.21(b)(50) and 

resolving “any ambiguity in subpart ([iv]) of that 

paragraph, which includes ‘any pollutant that otherwise is 

subject to regulation under the Act.’” See Memo at 1. As 

the Memo explains, the statute and regulation use similar 

language – the regulation defines a regulated NSR pollutant 

to include “[a]ny pollutant that otherwise is subject to 

regulation under the Act” and requires BACT for “each 

regulated NSR pollutant,” 40 CFR 52.21(b)(50) and (j), 

while the Act requires BACT for “each pollutant subject to 

regulation under this [Act],” CAA sections 165(a)(4) and 

169. The EAB had determined that “the meaning of the term 

‘subject to regulation under this Act’ as used in [CAA] 

sections 165 and 169 is not so clear and unequivocal as to 

preclude the Agency from exercising discretion in 

interpreting the statutory phrase” in implementing the PSD 

program. Deseret at 63.
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The PSD Interpretive Memo seeks to resolve the 

ambiguity in implementation of the PSD program by stating 

that “EPA will interpret this definition of ‘regulated NSR 

pollutant’ to exclude pollutants for which EPA regulations 

only require monitoring or reporting but to include each 

pollutant subject to either a provision in the Clean Air 

Act or regulation adopted by EPA under the Clean Air Act 

that requires actual control of emissions of that 

pollutant.” The Memo states that “EPA has not previously 

issued a definitive interpretation of the definition of 

‘regulated NSR pollutant’ in section 52.21(b)(50) or an 

interpretation of the phrase ‘subject to regulation under 

the Act’ that addressed whether monitoring and reporting 

requirements constitute ‘regulation’ within the meaning of 

this phrase.” The Memo, however, explains that the 

interpretation reflects the “considered judgment” of thenAdministrator Johnson regarding the PSD regulatory 

requirements and is consistent with both historic Agency 

practice and prior statements by Agency officials. See

Memo at 1-2. 

The PSD Interpretive Memo is not a substantive rule 

promulgated under section 307(d) of the CAA, but rather an 

interpretation of the terms of a regulation at 40 CFR 
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52.21(b)(50).2 An interpretive document is one that 

explains or clarifies, and is consistent with, existing 

statutes or regulation. National Family Planning and 

Reproductive Health Ass’n v. Sullivan, 979 F.2d 227, 236-37 

(D.C. Cir. 1992). The PSD Interpretive Memo explains and

clarifies the meaning of the definition of “regulated NSR 

pollutant” in section 52.21(b)(50) of the existing NSR 

regulations, and does not alter the meaning of the 

definition in any way that is inconsistent with the terms 

of the regulation. As a result, EPA concluded that the PSD 

interpretive Memo was an interpretive rule that could be 

issued without a notice and comment rulemaking process. 

However, the PSD Interpretive Memo observed that the 

adoption of an interpretation of a rule without a notice 

and comment process does not preclude subsequent action by 

the Agency to solicit public input on the interpretation. 

Indeed, given the significant public interest in the issue 

addressed in the December 18, 2008 memorandum, EPA 

 

2

The PSD Interpretive Memo also reflects EPA’s 

interpretation of sections 165(a)(4) and 169(3) of the CAA, 

which use language similar to the EPA regulations that are 

based on these provisions of the statute. The Memo 

discusses the Agency’s interpretation of the CAA and 

concludes that the Agency’s interpretation of its 

regulations is not precluded by the terms of the CAA. 
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subsequently elected to seek public input on the memorandum 

and alternative readings of the regulations. 

On December 31, 2008, EPA received a petition for 

reconsideration of the position taken in the PSD 

Interpretive Memo from Sierra Club and 14 other 

environmental, renewable energy, and citizen organizations. 

Petition for Reconsideration, In the Matter of: EPA Final 

Action Published at 73 FR 80300 (Dec. 31, 2008), entitled 

“Clean Air Act Prevention of Significant Deterioration 

(PSD) Construction Permit Program; Interpretation of 

Regulations That Determine Pollutants Covered by the 

Federal PSD Permit Program.” Petitioners argued that the 

PSD Interpretive Memo “was impermissible as a matter of 

law, because it was issued in violation of the procedural 

requirements of the Administrative Procedures [sic] Act. . 

. and the Clean Air Act. . ., it directly conflicts with 

prior agency actions and interpretations, and it purports 

to establish an interpretation of the Act that conflicts 

with the plain language of the statute.” See Petition at 

2. Accordingly, Petitioners requested that EPA reconsider 

and retract the PSD Interpretive Memo. Petitioners later 

amended their Petition for Reconsideration to include a 

request to stay the effect of the Memo pending the outcome 

of the reconsideration request. Amended Petition for 
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Reconsideration (filed Jan. 6, 2009).3

On February 17, 2009, EPA granted the petition for 

reconsideration on the PSD Interpretive Memo, on the basis 

of the authority conferred by section 553(e) of the 

Administrative Procedure Act (APA), and announced its

intent to conduct a rulemaking to allow for public comment 

on the issues raised in the Memo and on any issues raised 

by the opinion of the EAB’s Deseret decision, to the extent 

they do not overlap with the issues raised in the Memo.4

Because the Memo was not a substantive rule promulgated 

under section 307(d) of the APA, the reconsideration action 

was not a reconsideration under the authority under section 

307(d)(7)(B) of the CAA. See Letter from Lisa P. Jackson, 

EPA Administrator, to David Bookbinder, Chief Climate 

Counsel at Sierra Club (Feb. 17, 2009) EPA did not stay 

the effectiveness of the PSD Interpretive Memo pending 

 

3 On January 15, 2009, a number of environmental 

organizations that filed this Petition for Reconsideration 

also filed a petition challenging the PSD Interpretive Memo 

in U.S. Court of Appeals for the District of Columbia 

Circuit. Sierra Club v. E.P.A., No. 09-1018 (D.C. Cir., 

filed Jan. 15, 2009). Thereafter, various parties moved to

intervene in that action or filed similar petitions 

challenging the Memo. The consolidated D.C. Circuit cases 

have been held in abeyance pending this reconsideration 

process. Id., Order (filed March 9, 2009).

4

 Because the grant of reconsideration directed the Agency 

to conduct this reconsideration using a notice and comment 

process, this action does not address the procedural 

challenge presented in the Petition for Reconsideration. 
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reconsideration, but she did reiterate that the Memo “does 

not bind States issuing [PSD] permits under their own State 

Implementation Plans.” Id. at 1. 

On October 7, 2009 (74 FR 51535), EPA proposed a 

reconsideration of the PSD Interpretive Memo that solicited 

comment on five possible interpretations of the regulatory 

phrase “subject to regulation” – the “actual control” 

interpretation (adopted by the Memo); the “monitoring and 

reporting” interpretation (advocated by Petitioners); the 

inclusion of regulatory requirements for specific 

pollutants in SIPs (discussed in both the Memo and the 

Petition for Reconsideration);

5 an EPA finding of 

endangerment (discussed in the Memo); and the grant of a 

section 209 waiver interpretation (raised by commenters in 

another EPA action). EPA also addressed, and requested 

public comment on, other issues raised in the PSD 

Interpretive Memo and related actions that may influence 

this reconsideration. 

Of the five interpretations described in the proposed 

reconsideration notice, we expressly favored the actual 

 

5 Since the only change between the original Petition (filed 

Dec. 31, 2008) and the Amended Petition (filed Jan. 6, 

2009) is the added request that EPA stay the effect of the 

PSD Interpretive Memo pending the outcome of the 

reconsideration request, the remainder of this notice 

references the original Petition when summarizing the 

arguments contained in those two documents.
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control interpretation, which has remained in effect since 

issuing the memorandum, notwithstanding the EPA’s grant of 

reconsideration. We explained that the actual control 

interpretation best reflects our past policy and practice, 

is in keeping with the structure and language of the 

statute and regulations, and best allows for the necessary 

coordination of approaches to controlling emissions of 

newly identified pollutants. While the other 

interpretations may represent reasoned approaches for 

interpreting “subject to regulation,” no particular one is 

compelled by the statute, nor did the EAB determine that 

any one of them was so compelled. Because we had 

overarching concerns over the policy and practical 

application of each of the alternative interpretations, we 

proposed to adopt the actual control interpretation. 

Nevertheless, we requested comment on all five of the 

interpretations. 

III. This Action

A. Overview

EPA has made a final decision to continue applying 

(with one limited refinement) the Agency’s existing 

interpretation of 40 CFR 52.21(b)(50) that is articulated 

in the PSD Interpretive Memo. For reasons explained below, 

and addressed in further detail in the document “EPA’s 
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Response to Public Comments on Reconsideration of the PSD 

Interpretive Memo”, after reviewing the comments, EPA has 

concluded that the “actual control interpretation” is a 

permissible interpretation of the CAA and is the most 

appropriate interpretation to apply given the policy 

implications. However, EPA is refining its interpretation 

in one respect to establish that PSD permitting 

requirements apply to a newly regulated pollutant at the 

time the regulation requiring actual control of emissions 

of that pollutant “takes effect” (rather than upon 

promulgation or the legal effective date of the 

regulation). In addition, this notice addresses several 

outstanding questions regarding the applicability of the 

PSD and Title V permitting programs to GHGs upon the 

promulgation of EPA regulations establishing limitations on 

such pollutants from vehicles under Title II of the CAA.

6

EPA received 71 comments on the proposed 

reconsideration notice published on October 7, 2009 (74 FR 

 

6

 On September 28, 2009, EPA proposed a rule establishing 

emissions standards for new motor vehicles, starting with 

Model Year 2012, that would reduce GHGs and improve fuel 

economy from motor vehicles. This proposal was a joint 

proposal by EPA and the U.S. Department of Transportation

(DOT), with DOT proposing to adopt corporate average fuel 

economy (CAFE) standards for model years 2012 and after. 

See 74 FR 49453. 
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51535).7 Commenters represented a range of interests, 

including state regulatory agencies, corporations that may 

need to obtain PSD permits, trade associations representing 

various industrial sectors, and environmental and public 

interest groups. Commenters representing states and 

regulated entities generally expressed support for the 

actual control interpretation, while environmental and 

public interest groups generally favored the alternative 

interpretations. States and regulated entities also 

supported EPA’s proposed action to apply PSD requirements 

at the point in time when an actual control requirement 

becomes effective, with many entities specifically 

requesting that EPA interpret “effective” to mean the 

compliance date of a rule. Environmental stakeholders

supported retaining the position in the existing PSD 

Interpretive Memo that PSD requirements apply to a 

pollutant upon the promulgation of an actual control 

requirement for that pollutant. 

EPA has not been persuaded that the Agency is 

compelled by the CAA, the terms of EPA regulations, or 

 

7 In some cases, a commenter on the proposed reconsideration 

of the PSD Interpretive Memo addressed an issue or topic 

that is under consideration in the forthcoming PSD and 

Title V GHG Tailoring Rule. Accordingly, we refer the 

reader to that rulemaking for EPA responses to those 

comments.
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prior EPA action to apply any of the four alternatives to 

its preferred interpretation described in the October 7, 

2009 notice – monitoring and reporting requirement, EPAapproved SIP, endangerment finding, or CAA section 209 

waiver. EPA has likewise not been persuaded that all of 

the alternative interpretations are precluded by the CAA. 

However, since Congress has not precisely spoken to this 

issue, EPA has the discretion to choose among the range of 

permissible interpretations of the statutory language. 

Since EPA’s interpretation of the regulations is not 

precluded by the statutory language, we are electing to 

maintain that interpretation on policy grounds. We have 

concluded that the “actual control” interpretation is not 

only consistent with decades of past practice, but provides 

the most reasonable and workable approach to developing an 

appropriate regulatory scheme to address newly identified 

pollutants of concern. Thus, except as to the one element 

that EPA proposed to modify, EPA is reaffirming the PSD 

Interpretive Memo and its establishment of the actual 

control interpretation as EPA’s definitive interpretation 

of the phrase “subject to regulation” under the PSD 

provisions in the CAA and EPA regulations. 

EPA has been persuaded by public comments on the 

proposed reconsideration to modify the portion of its 
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interpretation regarding the timing of when a pollutant 

becomes subject to regulation under the CAA and thus 

covered by the requirements of the PSD permitting program. 

Specifically, EPA is modifying its interpretation of 40 CFR 

52.21(b)(50) of its regulations, and the parallel provision 

in 40 CFR 51.166(b)(49), to establish that the PSD 

requirements will not apply to a newly regulated pollutant 

until a regulation requiring actual control of emissions of 

that pollutant “takes effect.” EPA has concluded that this 

approach is consistent with the CAA and a reasonable 

reading of the regulatory text. 

Based on these final determinations, EPA will continue 

to apply the interpretation reflected in the PSD 

Interpretive Memo with one refinement. For the reasons 

discussed in more detail below, EPA has not generally found 

cause to change the discussion or reasoning reflected in 

the Memo. As a result, EPA does not see a need to either 

withdraw or re-issue the Memo. However, this notice 

refines one paragraph of that memorandum to reflect EPA’s 

current view that a pollutant becomes subject to regulation 

at the time the first control requirements applicable to a 

pollutant take effect. Public comments raised several 

questions regarding the application of the PSD program and 

Title V permits to GHGs that EPA did not specifically raise 
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in the October 7, 2009 proposed notice of reconsideration. 

Some of these comments raised significant issues that the 

Agency recognizes the need to address at this time to 

ensure the orderly transition to the regulation of GHGs 

under these permitting programs. Thus, this notice 

reflects additional interpretations and EPA statements of 

policy on topics not discussed in the October 7, 2009 

notice. These interpretations and polices have been 

developed after careful consideration of the public 

comments submitted to EPA on this action and related 

matters. In subsequent actions, EPA may address additional 

topics raised in public comments on this action that the 

Agency did not consider necessary to address at this time. 

EPA will apply the interpretations and policies 

described in this notice upon signature of this notice by 

the Administrator. Under section 553(c) of the APA, 

interpretive rules and statements of policy are not covered 

by the requirement that publication or service of a 

substantive rule be made not less than 30 days before its 

effective date. 

Regarding GHGs, EPA has concluded that PSD program 

requirements will apply to GHGs upon the date that the 

tailpipe standards for light-duty vehicles (known as the 

“LDV Rule”) take effect. Based on the proposed LDV Rule, 
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those standards will take effect when the 2012 model year 

begins, which is no earlier than January 2, 2011. While 

the LDV Rule will become “effective” for the purposes of 

planning for the upcoming model years as of 60 days 

following publication of the rule (following Congressional 

review), the rule does not “take effect” – i.e., requiring 

compliance through vehicular certification before 

introducing any Model Year 2012 into commerce – until Jan. 

2, 2011, or approximately 9 months after the planned 

promulgation of the LDV Rule. Furthermore, as EPA will 

explain in detail in the final action on the PSD and Title 

V GHG Tailoring Rule (known as the “Tailoring Rule”)8, EPA 

has further concluded that, in light of the significant 

administrative challenges presented by the application of 

the PSD requirements for GHGs, it is administratively

necessary to defer applying the PSD provisions to sources 

that are major based only on GHGs until a date that extends 

beyond January 2, 2011. 

B. Analysis of Proposed and Alternative Interpretations 

for Subject to Regulation

1. Actual Control Interpretation

 

8 The proposed “Tailoring Rule” can be found at 74 FR 55291 

(Oct. 27, 2009).
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EPA has concluded that the “actual control” 

interpretation (as articulated in the PSD Interpretive 

Memo) is permissible under the CAA and is preferred on 

policy grounds. Thus, EPA will continue to interpret the 

definition of “regulated NSR pollutant” in 40 CFR 

52.21(b)(50) to exclude pollutants for which EPA 

regulations only require monitoring or reporting but to 

include each pollutant subject to either a provision in the 

CAA or regulation promulgated by EPA under the CAA that 

requires actual control of emissions of that pollutant. As 

discussed above, EPA will also interpret section 

51.166(b)(49) of its regulations in this manner. This 

interpretation is supported by the language and structure 

of the regulations and is consistent with past practice in 

the PSD program and prior EPA statements regarding 

pollutants subject to the PSD program. EPA’s various 

responsibilities under the CAA are most effectively 

implemented by making PSD emissions limitations applicable 

to pollutants after a considered judgment by EPA (or 

Congress) that particular pollutants should be subject to 

control or limitation. The actual control interpretation 

promotes the orderly administration of the permitting 

program by allowing the Agency to first assess whether 

there is a justification for controlling emissions of a 
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particular pollutant under relevant criteria in the Act 

before requiring BACT emissions limitations under the PSD 

permitting program. 

Because the term “regulation” is susceptible to more 

than one meaning, there is ambiguity in the phrase “each 

pollutant subject to regulation under the Act”9 that is used 

in both sections 165(a)(4) and 169(3) of the CAA. As 

discussed in the PSD Interpretive Memo, the term 

“regulation” can be used to describe a rule contained in a 

legal code, such as the Code of Federal Regulations, or the 

act or process of controlling or restricting an activity. 

The primary meaning of the term “regulation” in Black’s Law 

Dictionary (8th Ed.) is “the act or process of controlling 

by rule or restriction.” However, an alternative meaning 

in this same dictionary defines the term as “a rule or 

order, having legal force, usu. issued by an administrative 

agency or local government.” The primary meaning in 

Webster’s dictionary for the term “regulation” is “the act 

of regulating: the state of being regulated.” Merriam-

 

9 The CAA requires BACT for “each pollutant subject to 

regulation under this Act.” CAA §§165(a)(4), 169(3). The 

United States Code refers to “each pollutant regulated 

under this chapter,” which is a reference to Chapter 85 of 

Title 42 of the Code, where the CAA is codified. See 42 

U.S.C. §§7475(a)(4), 7479(3). For simplicity, this notice 

generally uses “the Act” and the Clean Air Act section 

numbers rather than the U.S. Code citation. 
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Webster’s Collegiate Dictionary 983 (10th ed. 2001). 

Webster’s secondary meaning is “an authoritative rule 

dealing with details of procedure” or “a rule or order 

issued by an executive authority or regulatory agency of a 

government and having the force of law.” Webster’s also 

defines the term “regulate” and the inflected forms 

“regulated” and “regulating” (both of which are used in 

Webster’s definition of “regulation”) as meaning “to govern 

or direct according to rule” or to “to bring under the 

control of law or constituted authority.” Id.

The PSD Interpretive Memo reasonably applies a common 

meaning of the term “regulation” to support a permissible 

interpretation that the phrase “pollutant subject to 

regulation” means a pollutant subject to a provision in the 

CAA or a regulation issued by EPA under the Act that 

requires actual control of emissions of that pollutant. 

Public comments have not demonstrated the dictionary 

meanings of the term “regulation” described in the Memo are 

no longer accepted meanings of this term. In light of the 

different meanings of the term “regulation,” EPA has not 

been persuaded by public comments that the CAA plainly and 

unambiguously requires that EPA apply any of the other 

interpretations described in the October 7, 2009 notice. 

Moreover, the Memo carefully explains how the actual 
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control interpretation is consistent with the overall 

context of the CAA in which sections 165(a)(4) and 169(3) 

are found. After consideration of public comment, EPA 

continues to find this discussion persuasive. The “subject 

to regulation” language appears in the BACT provisions of 

the Act, which themselves require actual controls on 

emissions. The BACT provisions reference the New Source 

Performance Standards (NSPS) and other control requirements 

under the Act, which establish a floor for the BACT 

requirement. See 42 U.S.C. §7479(3). Other provisions in 

the CAA that authorize EPA to establish emissions 

limitations or controls on emissions provide criteria for 

the exercise of EPA’s judgment to determine which 

pollutants or source categories to regulate. Thus, it 

follows that Congress expected that pollutants would only 

be regulated for purposes of the PSD program after: (1) 

the EPA promulgated regulations requiring control of a 

particular pollutants on the basis of considered judgment, 

taking into account the applicable criteria in the CAA, or 

(2) EPA promulgates regulations on the basis of 

Congressional mandate that EPA establish controls on 

emissions of a particular pollutant, or (3) Congress itself 

directly imposes actual controls on emissions of a 

particular pollutant. In addition, considering other 
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sections in the Act that require reasoned decision-making 

and authorize the collection of emissions data prior to 

establishing controls on emissions, it is also consistent 

with the Congressional design to require BACT limitations 

for pollutants after a period of data collection and study 

that leads to a reasoned decision to establish control 

requirements. Public commenters did not demonstrate that 

it was erroneous for EPA to interpret the PSD provisions in 

this manner, based on the context of the Act. 

Furthermore, the actual control interpretation is 

consistent with the terms of the regulations EPA 

promulgated in 2002.10 EPA continues to find the reasoning 

of the PSD Interpretive Memo to be persuasive. The 

structure and language of EPA’s definition of ‘regulated 

NSR pollutant’ at 40 CFR 52.21(b)(50) supports the actual 

control interpretation. The first three parts of the 

definition describe pollutants that are subject to 

regulatory requirements that mandate control or limitation 

of the emissions of those pollutants, which suggests that 

the use of “otherwise subject to regulation” in the fourth 

prong of the definition also intended some prerequisite act 

or process of control. The definition’s use of “subject to 

regulation” should be read in light of the primary meanings 

 

10 See 67 FR 80186-80289.
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of “regulation” described above, which each use or 

incorporate the concept of control. 

One commenter stated that EPA’s suggestion that its 

proposed interpretation will allow for a more practical 

approach to determining whether emissions of air pollutants 

endanger health and human welfare amounts only to a policy 

preference. The commenter argued that EPA’s policy 

preference should be subordinate to statutory language and 

Congressional intent. Another commenter made similar 

comments and stated that EPA cannot avail itself of 

additional, non-statutory de facto extensions of time to 

fulfill its statutory obligations. 

Where the governing statutory authority is susceptible 

to more than one interpretation, it is not impermissible 

for EPA to apply policy preferences when determining which 

interpretation to apply, so long as the interpretation EPA 

elects to follow is a permissible one. The PSD 

Interpretive Memo provides a persuasive explanation for why 

the interpretation reflected in that memorandum is 

consistent with the terms of the CAA and Congressional 

intent. In this instance, EPA’s policy preferences are 

fully consistent with that intent. As explained above, 

Congress intended for EPA to gather data before 
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establishing controls on emissions and to make reasoned 

decisions.

EPA continues to prefer the actual control 

interpretation because it ensures an orderly and manageable 

process for incorporating new pollutants into the PSD 

program after an opportunity for public participation in 

the decision making process. Several commenters who 

supported EPA’s proposal to continue applying the “actual 

control” interpretation identified these considerations as 

important reasons that EPA should continue doing so. EPA 

agrees with these comments. As discussed persuasively in 

the PSD Interpretive Memo, under this interpretation, EPA 

may first assess whether there is a justification for 

controlling emissions of a particular pollutant under 

relevant criteria in the Act before imposing controls on a 

pollutant under the PSD program. In addition, this 

interpretation permits the Agency to provide notice to the 

public and an opportunity to comment when a new pollutant 

is proposed to be regulated under one or more programs in 

the Act. It also promotes the orderly administration of 

the permitting program by providing an opportunity for EPA 

to develop regulations to manage the incorporation of a new 

pollutant into the PSD program, for example, by 

promulgating a significant emissions rate (or de minimis
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level) for the pollutant when it becomes regulated. See 40 

CFR 52.21(b)(23). Furthermore, this interpretation 

preserves the Agency’s ability to gather data on pollutant 

emissions to inform their judgment regarding the need to 

establish controls on emissions without automatically 

triggering such controls. This interpretation preserves 

EPA’s authority to require control of particular pollutants 

through emissions limitations or other restrictions under 

various provisions of the Act, which would then trigger the 

requirements of the PSD program for any pollutant addressed 

in such an action. 

Some commenters who opposed the actual control 

interpretation argued that this deliberate approach leads 

to “analysis paralysis” and is subject to political 

manipulation. The commenter further noted that the caseby-case BACT requirement does not contemplate waiting years 

for EPA to conduct analyses and “develop” control options; 

rather, BACT must be based on control options that are 

available. Then, permitting agencies are to make “case-bycase” determinations “taking into account energy, 

environmental, and economic impacts and other costs,” 

thereby ensuring that the decision is informed by the 

available solutions, their efficacy and costs.
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While this analysis may sometimes take more time than 

the commenter would prefer, a deliberative and orderly 

approach to regulation is in the public interest and 

consistent with Congressional intent. It would be 

premature to impose the BACT requirement on a particular 

pollutant if neither EPA nor Congress has made a considered 

judgment that a particular pollutant is harmful to public 

health and welfare and merits control. 

Once the Agency has made a determination that a 

pollutant should be controlled using one or more of the 

regulatory tools provided in the CAA and those controls 

take effect, EPA agrees that a BACT analysis must then be 

completed based on available information. As the commenter 

points out, the BACT process is designed to determine the 

most effective control strategies available or in each 

instance, considering energy, environmental, and economic 

impacts. Thus, EPA agrees that the onset of the BACT 

requirement should not be delayed in order for technology 

or control strategies to be developed. Furthermore, EPA 

agrees with the commenter that delaying the application of 

BACT to enable development of guidance on control 

strategies is not necessarily consistent with the BACT 

requirement. The BACT provisions clearly contemplate that 

the permitting authority will develop control strategies on 
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a case-by-case basis. Thus, EPA is not in this final 

action relying on the need to develop guidance for BACT as 

a justification for choosing to continue applying the 

actual control interpretation. However, in the absence of 

guidance on control strategies from EPA and other 

regulatory agencies, the BACT process is more time and 

resource intensive. Under a mature PSD permitting program, 

successive BACT analyses establish guidelines and 

precedents for subsequent BACT determinations. However, 

when a new pollutant is regulated, the first permit 

applicants and permitting authorities that are faced with 

determining BACT for a new pollutant must invest more time 

and resources in making an assessment of BACT under the 

statutory criteria. Given the potentially large number of 

sources that could be subject to the BACT requirement when 

EPA regulates GHGs, the absence of guidance on BACT 

determinations for GHGs presents a unique challenge for 

permit applicants and permitting authorities. For this 

reason, along with other considerations, EPA will seek to 

address this challenge through a phase in of the permitting 

program under the Tailoring Rule. 

Several commenters expressed concern with EPA’s 

explanation that the actual control interpretation best 

reflects EPA’s past practice. One commenter argued that 
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the Deseret decision rejects the idea that “past policy and 

practice” is a sufficient justification for EPA’s preferred 

interpretation. In addition, several commenters argued 

that the memorandum was in fact not consistent with past 

EPA practice, based on their interpretation of a statement 

made in the preamble to a rule which promulgated PSD 

regulations in 1978. 

While the record continues to show that the actual 

control interpretation is consistent with EPA’s historic 

practice, EPA agrees that continuity with past practice 

alone does not justify maintaining a position when there is 

good cause to change it. In this case, however, EPA has 

not found cause to change an interpretation that is 

consistent with Congressional intent and supported by the 

policy considerations described earlier. Thus, EPA is not 

retaining the actual control interpretation simply to 

maintain continuity with historic practice. The record 

reflects that EPA’s past practice was grounded in a 

permissible interpretation of the law and supported by 

rational policy considerations. Public commenters have not 

otherwise persuaded EPA to change its historic practice in 

this area. 

A review of numerous federal PSD permits shows that 

EPA has been applying the actual control interpretation in 
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practice – issuing permits that only contained emissions 

limitations for pollutants subject to regulations requiring 

actual control of emissions under other portions of the 

Act. Furthermore, in 1998, well after promulgation of the 

initial CO2 monitoring regulations in 1993, EPA’s General 

Counsel concluded that CO2 would qualify as an “air 

pollutant” that EPA had the authority to regulate under the 

CAA, but the General Counsel also observed that “the 

Administrator has made no determination to date to exercise 

that authority under the specific criteria provided under 

any provision of the Act.”11 The 1978 Federal Register

notice promulgating the initial PSD regulations stated that 

pollutants “subject to regulation” in the PSD program 

included “any pollutant regulated in Subchapter C of Title 

40 of the Code of Federal Regulations.” Commenters argue 

this statement illustrates that EPA has in fact applied the 

PSD BACT requirement to any pollutant subject to only a 

monitoring requirement codified in this portion of the Code 

of Federal Regulations. However, this comment overlooked 

the discussion in the PSD Interpretive Memo that explains 

why this 1978 statement did not resolve the issue addressed 

 

11 Memorandum from Jonathan Z. Cannon, General Counsel to 

Carol M. Browner, Administrator, entitled EPA’s Authority 

to Regulate Pollutants Emitted by Electric Power Generation 

Sources (April 10, 1998).
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in the Memo. The 1978 preamble did not amplify the meaning 

of the term “regulated in.” Thus, commenters have not 

demonstrated that EPA had concluded in 1978 that monitoring 

requirements equaled “regulation” within the meaning of 

sections 165(a)(4) and 169(3) of the CAA, nor have 

commenters provided any examples of permits issued by EPA 

after 1978 that demonstrate EPA’s interpretation was 

inconsistent with the practice described in the PSD 

Interpretive Memo.

Therefore, we affirm that the actual control 

interpretation expressed in the PSD Interpretive Memo 

continues be the operative statement for the EPA 

interpretation of the meaning of the regulatory phrase 

“subject to regulation” within the federal PSD rules. 

2. Monitoring and Reporting Interpretation 

EPA is not persuaded that the monitoring and reporting 

interpretation is compelled by the CAA, and the Agency 

remains concerned that application of this approach would 

lead to odd results and make the PSD program difficult to 

administer. EPA continues to find the reasoning of the PSD 

Interpretive Memo persuasive. 

The monitoring and reporting interpretation would make 

the substantive requirements of the PSD program applicable 

to particular pollutants based solely on monitoring and 
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reporting requirements (contained in regulations 

established under section 114 or other authority in the 

Act). This approach would lead to the perverse result of 

requiring emissions limitations under the PSD program while 

the Agency is still gathering the information necessary to 

conduct research or evaluate whether to establish controls 

on the pollutant under other parts of the Act. Such a 

result would frustrate the Agency’s ability to gather 

information using section 114 and other authority and make 

informed and reasoned judgments about the need to establish 

controls or limitations for particular pollutants. If EPA 

interpreted the requirement to establish emissions 

limitations based on BACT to apply solely on the basis of a 

regulation that requires collecting and reporting emissions 

data, the mere act of gathering information would 

essentially dictate the result of the decision that the 

information is being gathered to inform (whether or not to 

require control of a pollutant). Many commenters 

representing State permitting agencies and industry groups 

agree with the policy arguments advanced by EPA and others 

that EPA’s critical information gathering activities will 

be constrained, with likely adverse environmental and 

public health consequences, if monitoring requirements are 

necessarily associated with the potentially significant 
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implementation and compliance costs and resource 

constraints of the PSD program. Commenters expressed 

concern that without the ability to gather data or 

investigate unregulated pollutants, for fear of triggering 

automatic regulation under the CAA, EPA will not have the 

flexibility to review the validity of controlling new 

pollutants.

We agree that a monitoring and reporting 

interpretation would hamper the Agency’s ability to conduct 

monitoring or reporting for investigative purposes to 

inform future rulemakings involving actual emissions 

control or limits. In addition, it is not always possible 

to predict when a new pollutant will emerge as a candidate 

for regulation. In such cases, the Memo’s reasoning is 

correct in that we would be unable to promulgate any 

monitoring or reporting rule for such a pollutant without 

triggering PSD under this interpretation. 

An environmental organization disagreed with our 

proposed notice of reconsideration, and commented that EPA 

has issued monitoring and reporting regulations for CO2 in 

40 CFR 75, promulgated pursuant to section 821 of the CAA. 

The commenter felt that these monitoring and reporting 

rules are “regulation” in that they are contained in a 

legal code, have the force of law, and bring the subject 
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matter under the control of law and the EPA. Furthermore, 

the commenter says that EPA itself has characterized these 

monitoring and reporting requirements as “regulations.” In 

contrast, another commenter argued that an agency’s 

interpretation of a statute should focus first on the 

ordinary dictionary meaning of the terms used and that 

monitoring emissions does not fit within any of the types 

of activities understood to constitute “regulation” of 

those emissions in the ordinary meaning of that term. Each 

of these commenters focuses on only one of the two 

potential meanings of the term “regulation” described 

above. 

The commenter that favors the “monitoring and 

reporting” interpretation appears to focus only on the 

dictionary meanings that describe a rule contained in a 

legal code. The commenter has not demonstrated that it is 

impermissible for EPA to construe the CAA on the basis of 

another common meaning of the term “regulation.” In the 

context of construing the Act, the EAB observed in the 

Deseret case that a plain meaning could not be ascertained 

from looking solely at the word “regulation.” The Board 

reached this conclusion after considering the dictionary 

definitions of the term “regulation” cited above. Deseret 

slip op. at 28-29. EPA continues to find the reasoning of 
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the EAB and the PSD Interpretive Memo to be persuasive. 

The EAB found “no evidence of Congressional intent to 

compel EPA to apply BACT to pollutants that are subject 

only monitoring and reporting requirements.” See Deseret

at 63. 

Comments have not convincingly shown that Congress 

clearly intended to use the term “regulation” in section 

165(a)(4) and 169(3) to describe any type of rule in a 

legal code. Some commenters presented alternative theories 

of Congressional intent regarding the BACT provision, but 

they have not persuasively demonstrated that the 

interpretation of Congressional intent based on the context 

of the CAA described in the PSD Interpretive Memo is 

erroneous. 

For example, one commenter opposed to EPA’s proposed 

action commented that the PSD Interpretive Memo ignores the 

Congressionally-established purpose of PSD to protect 

public health and welfare from actual and potential adverse 

effects. See CAA §160(1). Specifically, this commenter 

stated that to limit application of BACT until after 

control requirements are in place following an endangerment 

finding ignores the broad, protective purpose of the PSD 

program. The commenter said that the emphasis on 

“potential adverse effect[s]” distinguishes PSD the 
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requirement from the NAAQS and NSPS programs, which require 

that EPA make an endangerment finding before establishing 

generally applicable standards such as the NSPS or motor 

vehicle emissions standards. According to this commenter, 

BACT’s case-by-case approach provides the dynamic 

flexibility necessary to implement an emission limitation 

appropriate to each particular source. This commenter 

feels that the PSD program’s ability to address potential

adverse effects is hindered by the position that an 

endangerment determination and actual control limits must 

be first established. 

EPA does not agree that the terms of section 160 cited 

by the commenter compel EPA to read sections 165(a)(4) and 

169(3) to apply to a pollutant before the Agency has made a 

determination that a pollutant is harmful and established

control requirements for the pollutant. Section 160(1) 

describes PSD’s purpose to “protect public health and 

welfare from any actual or potential adverse effect which 

in the Administrator’s judgment may reasonably be 

anticipated to occur from air pollution.” Thus, this goal 

contemplates an exercise of judgment by EPA to determine 

that an actually or potential adverse effect may reasonably 

be anticipated from air pollution. In that sense, this 

goal is consistent with NAAQS and NSPS programs, which 
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contemplate that regulation of a pollutant will not occur 

until a considered judgment by EPA that a substance or 

source category merits control or restriction. The 

commenter has not persuasively established that the 

“potential adverse effect” language in section 160(1) makes 

this provision markedly different than the language used in 

sections 108(a)(1)(A) and 111(b)(1)(A). All three sections 

use the phrase “may reasonably be anticipated” Furthermore, 

section 160 contains general goals and purposes and does 

not contain explicit regulatory requirements. The 

controlling language in the PSD provisions is the “subject 

to regulation” language in sections 165(a)(4) and 169(3). 

As discussed earlier, the “actual control” interpretation 

is based on a common and accepted meaning of the term 

“regulation.” To the extent the goals and purpose in 

section 160 are instructive as to the meaning of other 

provisions in Part C of the Act, section 160(1) is just one 

of several purposes of the PSD program that Congress 

specified. The Act also instructs EPA to ensure that 

economic growth occurs consistent with the preservation of 

existing clean air resources. CAA §160(3). EPA’s 

interpretation is consistent with this goal because it 

allows EPA to look at the larger picture by coordinating 
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control of an air pollutant under the PSD program with 

control under other CAA provisions. 

EPA finds the logic of the PSD Interpretive Memo more 

persuasive. The Memo considers the full context of the 

CAA, including the health and welfare criteria that 

generally must be satisfied to establish control 

requirements under other parts of the Act, information 

gathering provisions that contemplate data collection and 

study before pollutants are controlled, and requirements 

for reasoned decision making. While some commenters 

presented arguments for why it might be possible or 

beneficial to apply the BACT requirement before a control 

requirement is established for a pollutant elsewhere under 

the Act, these arguments do not demonstrate that the 

contextual reading of the Clean Air Act described in the 

PSD Interpretive Memo is erroneous. Thus, the comments 

have at best provided another permissible reading of the 

Act, but they do not demonstrate that EPA must require BACT 

limitations for pollutants that are not yet controlled but 

only subject to data collection and study. 

We continue to believe that the monitoring and 

reporting interpretation is inconsistent with past agency 

practice because, as the Memo notes, “EPA has not issued 

PSD permits containing emissions limitations for pollutants 
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that are only subject to monitoring and reporting 

requirements,” including CO2 emissions. Further, the Memo 

determines that the monitoring and reporting interpretation 

is not required under the 1978 preamble language, 

explaining that the preamble language could be interpreted 

in a variety of ways and “did not specifically address the 

issue of whether a monitoring or reporting requirement 

makes a pollutant ‘regulated in’ [Subpart C of Title 40] of 

the Code of Federal Regulations.” See Memo at 11-12. 

Commenters have not demonstrated that the Agency 

specifically intended, through this statement, to apply the 

PSD requirements to pollutants that were covered by only a 

monitoring and reporting requirement codified in this part 

of the CFR. 

A state agency commenter responded more convincingly

to the Petitioners’ contention that EPA has not identified 

a pollutant other than CO2 that would be affected by the 

monitoring and reporting interpretation by noting that 

EPA’s endangerment finding covers six GHGs, not just CO2. 

Further, a commenter noted that EPA has, in the past, 

imposed monitoring and/or reporting requirements for 

chemicals that EPA does not intend to regulate, nor is 

likely to want to do so in the future. For example, 

monitoring O2 in the stack of a boiler, which EPA provides 
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at 74 FR 51542, is a very real example that demonstrates 

that monitoring and reporting requirements alone cannot 

reasonably be interpreted to trigger PSD and BACT 

requirements.

For the reasons discussed above, we affirm the Memo’s 

rejection of the monitoring and reporting interpretation 

for triggering PSD requirements for a new pollutant.

3. State Implementation Plan (SIP) Interpretation

In discussing the application of the actual control 

interpretation to specific actions under the CAA, the PSD 

Interpretive Memo rejects an interpretation of “subject to 

regulation” in which regulatory requirements for a 

particular pollutant in the EPA-Approved State 

Implementation Plan (SIP) for a single state would “require 

regulation of that pollutant under the PSD program 

nationally.” (Hereinafter, referred to as the “SIP 

interpretation.”) In this action, we affirm and supplement 

our rationale for rejecting the SIP interpretation provided 

in the PSD Interpretive Memo and our reconsideration 

proposal. Since the meaning of the term “subject to 

regulation” is ambiguous and susceptible to multiple 

interpretations, the SIP interpretation is not compelled by 

the structure and language of the Act. Furthermore, there 
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would be negative policy implications if EPA adopted this 

interpretation. 

The Memo reasons that application of the SIP 

interpretation would convert EPA’s approval of regulations 

applicable only in one state into a decision to regulate a 

pollutant on a nationwide scale for purposes of the PSD 

program. The Memo explains that the establishment of SIPs 

is better read in light of the “cooperative federalism” 

underlying the Act, whereby Congress allowed individual 

states to create and apply some regulations more 

stringently than federal regulations within its borders, 

without allowing individual states to set national 

regulations that would impose those requirements on all 

states. See Ellis v. Gallatin Steel Co., 390 F.3d 461, 467 

(6th Cir. 2004). In rejecting the SIP interpretation, the 

Memo also explains that we adopted a similar position in 

EPA’s promulgation of the NSR regulations for fine 

particulate matter (or “PM2.5”), without any public comments 

opposing that position. Memo at 15-16.

EPA continues to believe that the CAA and our 

implementing regulations are intended to provide states 

flexibility to develop and implement SIPs to meet the air 

quality goals of their individual state. Each state’s 

implementation plan is a reflection of the air quality 
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concerns in that state, allowing a state to dictate 

treatment of specific pollutants of concern (or their 

precursors) within its borders based on air quality, 

economic, and other environmental concerns of that state. 

As such, pollutant emissions in one state may not present 

the same problem for a state a thousand miles away. As 

expressed in the PSD Interpretive Memo, we continue to have 

concerns that the SIP interpretation would improperly limit 

the flexibility of states to develop and implement their 

own air quality plans, because the act of one state to 

establish regulatory requirements for a particular 

pollutant would drive national policy. If EPA determined

that a new pollutant becomes “subject to regulation”

nationally within the meaning of section 165, then all 

states would be required to subject the new pollutant to 

PSD permitting whether or not control of the air pollutant 

was relevant for improving that state’s air quality. 

Whether one state, five states, or 45 states make the 

decision that their air quality concerns are best addressed 

by imposing regulations on a new pollutant, we do not think 

those actions should trump the cooperative federalism 

inherent in the CAA. While several states may face similar 

air quality issues and may choose regulation as the 

preferred approach to dealing with a particular pollutant, 
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we are concerned that allowing the regulatory choices of 

some number of states to impose PSD regulation on all other 

states would do just that. 

Some commenters support the SIP interpretation, and 

fault the Agency’s rejection of the interpretation by 

stating that neither the Act, nor the Memo, provides a 

basis for a position that regulation by a single state is 

not enough to constitute “regulation under the Act” on a 

nationwide basis for purpose of section 165. Petitioners 

and another commenter also assert that CO2 is already 

“subject to regulation under the Act” and take the position 

that any requirement EPA adopts and approves in an 

implementation plan is “subject to regulation under the 

Act” because it is approved by the EPA “under the Act,” and 

because it becomes enforceable by the state, by EPA and by 

citizens “under the Act” upon approval. 

EPA disagrees with the Petitioner and with this 

commenter that this reasoning necessarily means that a 

pollutant regulated in one State Implementation Plan 

approved by EPA must automatically be regulated through the 

PSD program nationally. In fact, Congress demonstrated 

intent, in the language and structure of the Act, for SIP 

requirements to have only a local or regional effect. 
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In section 102(a) of the CAA, Congress directs EPA to 

encourage cooperative activities among states, and the 

adoption of uniform State and local laws for the control of 

air pollution “as practicable in light of the varying 

conditions and needs.” This language informs the issue of 

whether SIP requirements have nationwide applicability in

two ways. First, there would be no need for EPA to 

facilitate uniform adoption of standards in different air 

quality control regions, if the regulation of an air 

pollutant by one region would automatically cause that 

pollutant to be regulated in another region. Second, 

Congress bounded its desire to promote uniformity by 

recognizing that addressing local air quality concerns may 

preempt national uniformity of regulation. 

Indeed, section 116 grants States the right to adopt 

more stringent standards than the uniform, minimum 

requirements set forth by EPA. See 42 U.S.C. 7416. The 

legislative history of the 1977 CAA Amendments shows that 

Congress understood that States may adopt different and 

more stringent standards then the federal minimum 

requirements. See , e.g., “...the States are given 

latitude in devising their own approaches to air pollution 

control within the framework of broad goals.” (Emphasis 

added); “The State of West Virginia has established more 
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stringent requirements than those which, through the 

Environmental Protection Agency, are considered as 

adequate...” and “The states have the right, however, to 

require higher standards, and they should have under the 

police powers.” S12456-8, July 26, 1976. Congress could 

not have intended states to have latitude to implement 

their own approaches to air pollution control, and 

simultaneously, require that air pollutants regulated by 

one State automatically apply in all other States.

Importantly, the legislative history also shows that 

Congress intended to limit the EPA’s ability to disapprove 

a State’s decision to adopt more stringent requirements in 

setting forth the criteria for approving state submissions 

under section 110. 

State implementation plans usually contain a unified 

set of requirements and frequently do not make 

distinctions between the controls needed to achieve 

one kind of ambient standard or another. To try to 

separate such emission limitations and make judgments

as to which are necessary to achieving the national 

ambient air quality standards assumes a greater 

technical capability in relating emissions to ambient 

air quality than actually exists.

A federal effort to inject a judgment of this kind 

would be an unreasonable intrusion into protected 

State authority. EPA’s role is to determine whether 

or not a State’s limitations are adequate and that 

State implementation plans are consistent with the 

statute. Even if a State adopts limits which may be 

stricter than EPA would require, EPA cannot second 
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guess the State judgment and must enforce the approved 

State emission limit.12

This Congressional intent is reflected within the 

statutory language. Under section 110(k)(3), the EPA 

Administrator “shall approve” a State’s submittal if it 

meets the requirements of the Act, and under section 110(l) 

“shall not” approve a plan revision “if the revision would 

interfere with any other applicable requirement of this 

Act.” Courts have similarly interpreted this language to 

limit EPA’s discretion to approve or disapprove SIP 

requirements. See, e.g., State of Conn. v. EPA, 656 F.2d 

902, 906 (2d. Cir. 1981) (“As is illustrated by Congress's 

use of the word “shall,” approval of an SIP revision by the 

EPA Administrator is mandatory if the revision has been the 

subject of a proper hearing and the plan as a whole 

continues to adhere to the requirements of section 

110(a)(2)”) (referencing Union Electric Co. v. EPA, 427 

U.S. 246, 257, 96 S.Ct. 2519, 2525, 49 L.Ed.2d 474 (1976); 

Mission Indus., Inc. v. EPA, 547 F.2d 123 (1st Cir. 

1976).). These provisions of the statute do not establish

any authority or criteria for EPA to judge the 

approvability of a State’s submission based on the 

 

12 Notably, the legislative record refers to “State” emission 

limit, and makes no note of this State emission limitation 

having broader applicability. 
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implications such approval would have nationally. The

absence of such authority or criteria in the applicable 

standard argues against nationwide applicability of SIP 

requirements and the SIP interpretation.

Moreover, under 307(b) of the Clean Air Act, Congress 

assigns review of specific regulations promulgated by EPA

and “... any other nationally applicable regulations 

promulgated or final action taken, by the Administrator 

under this Act ...” only to the U.S. Court of Appeals for 

the District of Columbia Circuit (“D.C. Circuit”). In 

contrast, “... the Administrator’s action in approving and 

promulgating any implementation plan under Section 110 ...

or any other final action of the Administrator under this 

Act ... which is local or regionally applicable may be 

filed only in the United States Court of Appeals for the 

appropriate circuit.” 42 U.S.C. §7607(b) (emphasis added). 

Thus, Congress set forth its intended applicability of 

these regulations in assigning judicial jurisdiction and 

clearly articulated that requirements in a state 

implementation plan are generally “local or regionally 

applicable.” 

Even if the Act could be read to support EPA review of 

the national implications of state SIP submissions, such an 

approach would be undesirable for policy reasons. As we 
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highlighted in our reconsideration notice, one practical 

effect of allowing state-specific concerns to create 

national regulation is that EPA’s review of SIPs would 

likely be much more time-consuming, because we would have 

to consider each nuance of the SIP as a potential statement 

of national policy. Thus, we would have heightened 

oversight of air quality actions in all states – even those 

regarding local and state issues that are best decided by 

local agencies. Our approval of SIPs would be delayed, 

which would in turn, delay State’s progress toward 

improving air quality. And, EPA would be required to 

defend challenges to the approval of a SIP with national 

implications in the D.C. Circuit Court of Appeals rather 

than the local Circuit Court of Appeals. The potential 

increased burden of reviewing and approving SIPs to analyze 

the national implications of each SIP, and the associated 

delay in improving air quality, creates a compelling policy 

argument against adoption of the SIP interpretation.

Petitioners also fault EPA’s reliance on Connecticut 

v. EPA, 656 F.2d 902(2d Cir. 1981) and asserts that this 

case has nothing to do with the issue of whether a 

pollutant is “subject to regulation under the Act.” In the 

PSD Interpretive Memo, EPA cited Connecticut to support the 

notion that while a state is free to adopt air quality 
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standards more stringent than required by the NAAQS or 

other federal law provisions, Congress precludes those 

stricter requirements from applying to other states. The 

Agency agrees with commenter that the circumstances 

involved in that case are not directly analogous, but, 

nevertheless, the case supports the inference that EPA has

drawn from it. The Court concluded that “[n]othing in the 

Act, however, indicates that a state must respect its 

neighbor's air quality standards (or design its SIP to 

avoid interference therewith) if those standards are more 

stringent than the requirements of federal law.” If a 

State is not required to respect the more stringent 

requirements of a neighboring State in developing its own 

implementation plan, then by inference, the State would 

also not be compelled to follow the more stringent 

standards. 

In sum, after reconsidering the legal and policy 

issues, we decline to adopt the SIP interpretation. 

4. Why we are not persuaded to adopt the Endangerment 

Finding Interpretation 

The PSD Interpretive Memo states that the fourth part 

of the regulated NSR pollutant definition (“[a]ny pollutant 

that otherwise is subject to regulation”) should not be 

interpreted “to apply at the time of an endangerment
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finding.” Memo at 14 (hereinafter, referred to as the 

“endangerment finding interpretation.”). After considering 

public comments, EPA is affirming the position expressed in 

the PSD Interpretative Memo that an endangerment finding 

alone does not make the requirements of the PSD program 

applicable to a pollutant. EPA maintains its view that the 

terms of EPA’s regulations and the relevant provisions of 

the CAA do not compel EPA to conclude that an air pollutant 

becomes “subject to regulation” when EPA finds that it 

endangers public health or welfare. 

As explained in EPA’s Endangerment and Cause or 

Contribute Findings for GHGs under section 202(a) of the 

CAA, there are actually two separate findings involved in 

what is often referred to as an endangerment finding. 74 

FR 66496 (Dec. 15, 2009). The first part addresses whether 

air pollution may reasonably be anticipated to endanger 

public health or welfare. The second part involves an 

assessment of whether emissions from the relevant source 

category cause or contribute to this air pollution. In 

this notice, we use the phrase “endangerment finding” to 

refer to EPA findings on both of these questions. The EPA 

interpretation described here applies to both steps of the 

endangerment finding regardless of whether the two steps 

occur together or separately. 
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As explained in the proposed reconsideration, an 

interpretation of the “subject to regulation” that does not 

include endangerment findings is consistent with the first 

three parts of the definition of “regulated NSR pollutant” 

in section 52.21(b)(50) of EPA’s regulations. Unlike the 

first three parts of the definition, an endangerment 

finding does not itself contain any restrictions (e.g., 

regarding the level of air pollution or emissions or use). 

Moreover, two of parts of the definition involve actions 

that can occur only after an endangerment finding of some 

sort has taken place. In other words, other parts of the 

definition already bypass an endangerment finding and apply 

the PSD trigger to a later step in the regulatory process. 

Specifically, under the first part of that definition, 

PSD regulation is triggered by promulgation of a National 

Ambient Air Quality Standard (NAAQS) under CAA section 109. 

However, in order to promulgate NAAQS standards under 

section 109, EPA must first list, and issue air quality 

criteria for a pollutant under section 108, which in turn 

can only happen after EPA makes an endangerment finding and 

a version of a cause or contribute finding, in addition to 

meeting other requirements. CAA sections 108(a)(1) and 

109(a)(2). Thus, if EPA were to conclude that an 

endangerment finding, cause or contribute finding, or both 
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would make a pollutant “subject to regulation” within the 

meaning of the PSD provisions, this would read all meaning 

out of the first part of the “regulated NSR pollutant” 

definition because a pollutant would become subject to PSD 

permitting requirements well before the promulgation of the 

NAAQS under section 109. 40 CFR 52.21(b)(50)(i).

Similarly, the second part of the definition of 

“regulated NSR pollutant” includes any pollutant that is 

subject to a standard promulgated under section 111 of the 

CAA. Section 111 requires EPA to list a source category, 

if in his or her judgment, “it causes, or contributes 

significantly to, air pollution which may reasonably be 

anticipated to endanger public health or welfare.” See CAA 

section 111(b)(1)(A). After EPA lists a source category, 

it promulgates NSPS for that source category. For a source 

category not already listed, if EPA were to list it on the 

basis of its emissions of a pollutant that was not 

previously regulated, and such a listing made that 

pollutant “subject to regulation” within the meaning of the 

PSD provisions, this chain of events would result in 

triggering PSD permitting requirements for that pollutant 

well in advance of the point contemplated by the second 

prong of the regulated NSR pollutant definition. 40 CFR 

52.21(b)(50)(ii).
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Furthermore, as discussed in the Memo, waiting to 

apply PSD requirements until after the actual promulgation 

of control requirements that follow an endangerment finding 

is sensible. The Memo explains that when promulgating the 

final regulations establishing the control requirements for 

a pollutant, EPA often makes decisions that are also 

relevant to decisions that must be made in implementing the 

PSD program for that pollutant. See Memo at 14. For 

example, EPA often does not make a final decision regarding 

how to identify the specific pollutant subject to an NSPS 

standard until the NSPS is issued, which occurs after both 

the endangerment finding and the source category listing. 

Public comments echoed these concerns. One commenter said 

that subjecting the pollutant to PSD requirements, 

including imposition of BACT emission limits, before the 

Agency has taken regulatory action to establish emission 

controls would turn the CAA process on its head. Another 

commenter indicated that triggering PSD review upon 

completion of an endangerment finding, but potentially 

before the specific control requirement that flows directly 

from the endangerment finding, clearly undermines the 

orderly process created by Congress for regulation of new 

air pollutants. A third commenter added that establishing 
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controls without having a standard to be achieved leads to 

uncertainty in the permitting program. 

In further support of EPA’s interpretation that an 

endangerment finding does not make an air pollutant 

“subject to regulation” is that an endangerment finding is 

not a codified regulation; it does not contain any 

regulatory text. The PSD Interpretive Memo explains, and 

numerous commenters agree, that an endangerment finding 

should not be construed as “regulating” the air 

pollutant(s) at issue because there is no actual regulatory 

language applicable to the air pollutants at this time in 

the Code of Federal Regulations. Rather, the finding is a 

prerequisite to issuing regulatory language that imposes 

control requirements. This is true even if the 

endangerment finding is a “rule” for purposes of 

administrative processes; that does not alter the fact that 

there is no regulation or regulatory text attached to the 

endangerment finding itself. Since an endangerment finding 

does not establish “regulation” within the common meaning 

of the term applied by EPA, we do not believe the CAA

compels EPA to apply PSD requirements to a pollutant on the 

basis of an endangerment finding alone. 

EPA’s interpretation is also consistent with the 

Supreme Court’s decision in Massachusetts. In its 
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decision, the Court acknowledged that EPA “has significant 

latitude as to the manner, timing, content and 

coordination” of the regulations that would result from a 

positive endangerment finding under section 202(a). See

549 U.S. at 532. Just as EPA has discretion regarding the 

timing of the section 202(a) control regulations that would 

flow from an endangerment finding under that section, it 

also has some discretion regarding the triggering of PSD 

controls that also ultimately result from the endangerment 

finding, and EPA has reasonably determined that PSD 

controls should not precede any other control requirements. 

Some commenters cited Massachusetts in support of EPA’s 

position. 

For the foregoing reasons, we affirm that the 

prerequisite act of making an endangerment finding, a cause 

or contribute finding, or both, does not make a pollutant 

“subject to regulation” for the purposes of the PSD 

program. This interpretation applies to both steps of the 

endangerment finding – the finding that air pollution may 

reasonably be anticipated to endanger public health or 

welfare, and the finding that emissions of an air pollutant 

from a particular source category causes or contributes to 

this air pollution – regardless of whether the two findings 

occur together or separately. As explained above, EPA 
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believes that there are strong legal and policy reasons for 

rejecting the endangerment finding interpretation. 

5. Section 209 Waiver Interpretation

EPA is affirming its position that an Agency decision 

to grant a waiver to a state under section 209 of the CAA

does not make the PSD program applicable to pollutants that 

may be regulated under state authority following a grant of 

such a waiver. For the reasons discussed below, the 

granting of a waiver does not make the pollutants that are 

regulated by a state after obtaining a section 209 waiver 

into pollutants regulated under the CAA. Furthermore, EPA 

is also affirming the position that PSD requirements are 

not applicable to a pollutant in all states when a handful 

of states besides the one obtaining the waiver adopt 

identical standards under section 177 that are then 

approved into state SIPs by EPA. 

As explained in the proposal, neither the PSD 

Interpretive Memo nor the Petition for Reconsideration 

raise the issue of whether a decision to grant a waiver 

under the section 209 of the CAA triggers PSD requirements 

for a pollutant regulated by a state after obtaining a 

waiver. EPA received comments in response to the notice of 

an application by California for a CAA section 209 waiver 

to the state of California to adopt and enforce GHG 
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emission standards for new motor vehicles that suggested 

that arguments might be made that the grant of the waiver 

made GHGs subject to regulation across the country for the 

purposes of PSD. See 74 FR 32744, 32783 (July 8, 2009). 

Those commenters requested that EPA state clearly that 

granting the California Waiver did not render GHGs subject 

to regulation under the CAA, while others commented that 

the question of when and how GHGs should be addressed in 

the PSD program or otherwise regulated under the Act should 

instead be addressed in separate proceedings. At that 

time, EPA stated that these interpretation issues were not 

a part of the waiver decision and would be more 

appropriately addressed in another forum. 

In our reconsideration of the PSD Interpretive Memo, 

EPA proposed to affirm the following position that we 

previously explained to Congress: “a decision to grant a 

waiver under section 209 of the Act removes the preemption 

of state law otherwise imposed by the Act. Such a decision 

is fundamentally different from the decisions to establish 

requirements under the CAA that the Agency and the [EAB] 

have considered in interpreting the provisions governing 

the applicability of the PSD program.” Letter from Lisa P. 

Jackson, EPA Administrator, to Senator James M. Inhofe 

(March 17, 2009). Specifically, EPA proposed to find that 
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neither the CAA nor the Agency’s PSD regulations make the 

PSD program applicable to pollutants that may be regulated 

by states after EPA has granted a waiver of preemption 

under section 209 of the CAA. Accordingly, EPA said that 

the Agency’s decision to grant a section 209 waiver to the 

state of California to establish its own GHG emission 

standards for new motor vehicles does not trigger PSD 

requirements for GHGs. 

Several commenters disagreed with EPA’s proposed 

position on the section 209 waiver provisions, and assert 

that EPA’s granting of the waiver results in “actual 

control.” According to these commenters, even under EPA’s 

interpretation of “subject to regulation,” CO2 is now 

subject to BACT. One of these commenters argues that EPA’s 

granting of a waiver is an EPA regulatory action that 

“controls” CO2 by allowing California and 10 other States to 

“regulate” CO2 under the Act. Another one of these 

commenters states that 10 States used section 177 of the 

CAA to adopt the California Standards into their SIPs, thus 

making these provisions enforceable by both EPA and 

citizens under the CAA. See, e.g., 42 U.S.C. §7413; 42 

U.S.C. §7604(a)(1), (f)(3). EPA has not been persuaded to 

change its proposed position based on these comments. 
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EPA does not disagree that the regulations promulgated 

by the state pursuant to the waiver will require control of 

emissions and thus constitute “regulation” of GHGs under 

the meaning applied by EPA. However, the principal issue 

here is whether this regulation occurs under the authority 

of the Clean Air Act (i.e., “under the Act.”). 

In our reconsideration notice, we explained that a 

waiver granted under CAA section 209(b)(1) simply removes 

the prohibition found in section 209(a) that forbids states 

from adopting or enforcing their own standards relating to 

control of emissions from new motor vehicles or new motor 

vehicle engines. Thus, the grant of the waiver does not 

lead to regulation “under the Act” because it simply allows 

California to exercise the same authority to adopt and 

enforce state emissions standards for new motor vehicles 

that California could have exercised without the initial 

prohibition in section 209(a). Several other commenters 

agreed with our position and reasoning. They explained 

that a waiver constitutes a withdrawal of federal 

preemption that allows a state to develop its own state 

standards to regulate vehicle emissions; the waiver does 

not transform these state standards into federal standards. 

Other supporting commenters also assert that there is 

nothing in the legislative history that supports a 
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conclusion that Congress intended section 209 waivers to 

result in application of PSD requirements. The opposing 

comments have not convincingly articulated a mechanism 

through which EPA’s action granting the waiver in fact 

requires control of emissions (as opposed to the states 

action under state law). If EPA granted the waiver alone 

and the state ultimately decided not to implement its 

regulation, there would be no control requirement in effect 

under the CAA. 

As we explained in our reconsideration notice, we also 

find it instructive that enforcement of any emission 

standard by the State after we grant a section 209 waiver 

would occur pursuant to state enforcement authority, not 

federal authority. EPA would continue to enforce the 

federal emission standards we promulgate under section 202 

only if the state standards are violated. As one commenter 

noted, CAA section 209(b)(3) provides that where a state 

has adopted standards that have been granted a waiver 

“compliance with such State standards shall be treated as 

compliance with applicable Federal standards for purposes 

of this subchapter,” but does not say that such state 

standards actually become the federal standards. 

Accordingly, we find the absence of legislative history 

supporting the contrary position, and the language in 
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section 209(b)(3) instructive as Congress clearly 

recognized the co-existence of the federal and state 

standards. This shows Congress did not intend that state 

regulations replace, or transform state standards into 

federal regulations “under the Act.” We agree with 

supporting commenters’ conclusions summarized here, and are 

not persuaded to change our proposed position. 

EPA has also concluded that the adoption of identical 

standards by several states under section 177 does not make 

a pollutant covered by those standards “subject to 

regulation under the Act” in all states. Like section 209, 

section 177 only grants States authority to regulate under 

state authority by removing federal preemption. Adoption 

of California standards by other States does not change the 

fact that those standards are still state standards 

enforced under state law and federal law is approved in a 

SIP. However, EPA agrees that when a state adopts 

alternate vehicle standards into its SIP pursuant to 

section 177, and EPA approves the SIP, these standards 

become enforceable by EPA and citizens under the CAA. 

Nonetheless, we do not agree that this compels an 

interpretation that any pollutant included in an individual 

state SIP requirement becomes “subject to regulation” in 

all states under the CAA. As discussed earlier, EPA 
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rejects the theory that a regulation of a pollutant in one 

or more states in an EPA-approved implementation plan 

necessarily makes that pollutant subject to regulation in 

all states. Such an approach is inconsistent with the 

fundamental principle of cooperative federalism embodied in 

the CAA. 

In summary, we conclude that neither the act of 

granting a section 209 waiver of preemption for state 

emission standards nor the EPA-approval of standards 

adopted into a SIP pursuant to section 177 makes a 

pollutant “subject to regulation under the Act” in all 

states for the purposes of the PSD program.

C. Other Issues On Which EPA Solicited Comment

1. Prospective Codification of Interpretation

Through the proposed reconsideration notice, EPA

requested comment on whether the Agency should codify its 

final interpretation of the “subject to regulation” in the 

statute and regulation by amending the federal PSD rules at 

40 CFR 52.21. We received a number of comments both in 

support of and opposing codification.

EPA does not believe it is necessary to codify its 

interpretation in the regulatory text. The Agency feels it

is more important to communicate our final decisions 

regarding the applicability of the PSD program in light of 
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recent and upcoming actions related to GHGs. More 

specifically, EPA recently finalized the “Mandatory 

Reporting of Greenhouse Gases” rule (known as the 

“Reporting Rule”)13, which added monitoring requirements for 

additional GHGs not covered in the Part 75 regulations. 

Further, EPA is poised to finalize by the end of March 2010 

the LDV Rule that will establish controls on GHGs that take 

effect in Model Year 2012, which starts as early as January 

2, 2011. EPA has determined that additional procedural 

steps would be necessary to complete a substantive rule to 

codify EPA’s interpretation. Furthermore, state law 

changes would need to follow a revision to EPA’s 

regulations. So even if EPA modified the text of the 

federal rules, many states would continue to need to 

proceed under an interpretation of their rules. EPA thus 

believes overall implementation of PSD permitting programs 

is facilitated by this notice that describes how existing 

requirements, in both federal and state regulations, shall 

be interpreted.

Likewise, EPA does not believe it is necessary to reissue the PSD Interpretive Memorandum. The Agency has not 

identified any legal requirement for the Agency to re-issue 

 

13

 See 74 FR 56259 (Oct. 30, 2009).
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an interpretive rule after a process of reconsideration. 

No comparable procedure is required after the 

reconsideration of substantive rule. In the latter 

situation, a notice of final action is sufficient to 

conclude the reconsideration process and an Agency may 

simply decline to revise an existing regulation that 

remains in effect. EPA has therefore concluded that this 

notice of final action is sufficient to conclude the 

reconsideration process initiated on February 17, 2009 and 

that there is no need to re-issue the entire memorandum in 

order for EPA to continue applying the interpretation 

reflected therein, as refined in this notice. 

2. Section 821 of the Clean Air Act Amendments of 1990

In the October 7, 2009 notice, EPA also solicited 

comment on the question of whether section 821 of the Clean 

Air Act Amendments of 1990 is part of the Clean Air Act. 

EPA indicated that the Agency was inclined against 

continuing to argue that section 821 was not a part of the 

CAA, as the Office of Air and Radiation and Region VIII had 

done in briefs submitted to the EAB in the Deseret matter. 

This question bears on the determination of whether the CO2

monitoring requirements in EPA’s Part 75 regulations are 

requirements “under the Act.” In the proposed 
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reconsideration notice, EPA explained that it would be 

necessary to resolve whether or not the CO2 monitoring and 

reporting regulations in Part 75 were promulgated “under 

the Act” if EPA adopted the monitoring and reporting 

interpretation. EPA received public comments on both sides 

of this issue, with one environmental organization pressing 

EPA to drop the position that section 821 is not a part of 

the CAA and several industry parties requesting that EPA 

affirm it.

EPA has not yet made a final decision on this 

question, and it is not necessary for the Agency to do so 

at this time. Since EPA is not adopting the monitoring and 

reporting interpretation, the status of section 821 is not 

material to the question of whether and when CO2 is “subject 

to regulation under the Act.” Because there are currently 

no controls on CO2 emissions, the pollutant is not “subject 

to regulation.” Given that the provisions in Part 75 do 

not “regulate” emissions of CO2, it is unnecessary determine 

whether such provisions are “under the Act” or not to 

determine PSD applicability. Furthermore, the promulgation 

of EPA’s Reporting Rule makes this issue even less 

material. In that rule, which became effective in December 

2009 and required monitoring to begin in January of this 

year, EPA established monitoring and reporting requirements 
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for CO2 and other GHGs under sections 114 and 208 of the 

CAA. Thus, there can be no dispute that monitoring and 

reporting of CO2 (as well as other GHGs) is now occurring 

under the CAA, regardless of the status of section 821 of 

the 1990 amendments. At this point, the section 821 issue 

would only become relevant if a court were to find that the 

monitoring and reporting interpretation is compelled by the 

CAA and a party subsequently seeks to retroactively enforce 

such a finding against sources that had not obtained a PSD 

permit. If this situation were to arise, EPA will address 

the section 821 issue as necessary. 

3. Timing of When a Pollutant becomes Subject to 

Regulation

The October 7, 2009 notice also solicited comment on 

whether the interpretation of “subject to regulation” 

should also more clearly identify the specific date on 

which PSD regulatory requirements would apply. In the PSD 

Interpretive Memo, EPA states that the language in the 

definition of “regulated NSR pollutant” should be 

interpreted to mean that the fourth part of the definition 

should “apply to a pollutant upon promulgation of a 

regulation that requires actual control of emissions.”

Memo at 14. After evaluating the underlying statutory 

requirement in the CAA and the language in all parts of the 
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regulatory definition more closely, EPA proposed to modify 

its interpretation of the fourth part of the definition 

with respect to the timing of PSD applicability. The 

Agency proposed to interpret the term “subject to 

regulation” in the statute and regulation to mean that PSD 

requirements apply when the regulations addressing a 

particular pollutant become final and effective.

Based on public comments and other considerations 

raised in the proposal, EPA has determined that it is 

necessary to refine the portion of the PSD Interpretive 

Memo that established the promulgation date of a control 

requirement as the time when a pollutant becomes subject to 

regulation for purposes of the PSD program. As a result, 

while the Memo is otherwise unchanged by the 

reconsideration proceeding, this final notice will adjust 

the first paragraph of section II.F of the Memo (bottom of 

page 14) to reflect EPA’s conclusion that it is more 

appropriate and consistent with the reasoning of the Memo 

to construe EPA regulations and the CAA to make a pollutant 

subject to PSD program requirements when the first controls 

on a pollutant take effect. This refines the approach 

proposed in the October 7, 2009 notice. 

Like the PSD Interpretive Memorandum itself, the

refinement to EPA’s interpretation described in this final 
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notice is an interpretation of the regulation at 40 CFR 

52.21 and the CAA provisions that provide the statutory 

foundation for EPA’s regulations. The refinement reflected 

in this notice explains, clarifies, and is consistent with 

existing statutes and the text of regulatory provisions at 

40 CFR 52.21(b)(50)(ii) through (iv). Some Courts have 

limited an Agency’s ability to change a long-standing, 

definitive, and authoritative interpretation of a 

regulation14 without engaging in a notice and comment 

rulemaking. See, e.g., Alaska Professional Hunters Ass’n 

v. FAA, 177 F.3d 1030, 1033-34 (D.C. Cir. 1999); Paralyzed 

Veterans of Am v. D.C. Arena L.P., 117 F.3d 579, 586 (D.C. 

Cir. 1997)). Although in most respects EPA’s 

interpretation of the PSD program regulations is unchanged 

by this action, EPA has completed the revision reflected in 

this action after a notice and comment process. 

Furthermore, since EPA initiated a process of reconsidering 

and soliciting comment on the PSD Interpretive Memo within 

three months of its issuance, the memorandum had not yet 

become particularly well-established or long-standing. See

 

14 To EPA’s knowledge, no court has required a rulemaking 

procedure when the Agency seeks to issue or change its 

interpretation of a statute. Nevertheless, EPA has 

completed this notice and comment proceeding before 

deciding to adopt the revised interpretation of the CAA 

described in this notice. 
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Metwest v. Secretary of Labor, 560 F.3d 506, 511 n.4 (D.C. 

Cir. 2009). Thus, the doctrines reflected in these cases 

do not preclude the action EPA has taken here to refine its 

interpretation of the regulations. 

The regulatory language of 40 CFR 52.21(b)(50)(iv) 

does not specify the exact time at which the PSD 

requirements should apply to pollutants in the fourth 

category of the definition of “regulated NSR pollutant.”

In the PSD Interpretive Memo, EPA states that EPA 

interprets the language in this definition to mean that the 

fourth part of the definition should “apply to a pollutant 

upon promulgation of a regulation that requires actual 

control of emissions.” Memo at 14. However, after

continuing to consider the underlying statutory requirement 

in the CAA and the language in all parts of the regulatory 

definition more closely, EPA proposed in the October 7, 

2009 notice to modify its interpretation of the fourth part 

of the definition with respect to the timing of PSD 

applicability. In the notice of reconsideration, EPA 

observed that the term “subject to regulation” in the 

statute and regulation is most naturally interpreted to 

mean that PSD requirements apply when the regulations 

addressing a particular pollutant become final and 

effective. In addition, EPA expressed a desire to 
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harmonize the application of the PSD requirements with the 

limitation in the Congressional Review Act (CRA) that a 

major rule cannot take effect until 60 days after it is 

published in the Federal Register. 

In this final notice on reconsideration, based on 

information provided in public comments, EPA is refining 

its interpretation of the time the PSD requirements will 

apply to a newly-regulated pollutant. Under the PSD 

program, EPA will henceforth interpret the date that a 

pollutant becomes subject to regulation under the Act to be 

the point in time when a control or restriction that 

functions to limit pollutant emissions takes effect or 

becomes operative to control or restrict the regulated 

activity. As discussed further below, this date may vary 

depending on the nature of the first regulatory requirement 

that applies to control or restrict emissions of a 

pollutant.

Several public comments observed that a date a 

regulation becomes “final and effective” and the date it 

actually “takes effect” may differ. Some commenters

supported these points with reference to federal court 

decisions that suggest the date that the terms of a 

regulation become effective can take more than one form. 

In one case involving the Congressional Review Act, the 
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United States Court of Appeals for the Federal Circuit 

observed that the date a regulation may “take effect” in 

accordance with the CRA is distinct from the “effective 

date” of the regulation. See Liesegang v. Sec’y of 

Veterans Affairs, 312 F.3d 1368, 1374-75 (Fed. Cir. 2002), 

amended on reh’g in part on other grounds, 65 Fed. Appx. 

717 (Fed. Cir. 2003). In this opinion, the court observed 

that “[t]he ordinary meaning of ‘take effect’ is ‘[t]o be 

in force; go into operation’” Id. at 1375 (quoting Black’s 

Law Dictionary at 1466 (7th ed. 1999). Based on this, the 

court reasoned that the CRA does not “change the date on 

which the regulation becomes effective” but rather “only 

affects the date when the rule becomes operative.” Id. In 

another case, the Second Circuit Court of Appeals described 

a distinction between the date a rule may “take effect” 

under the CRA, the “effective date” for application of the 

rule to regulated manufacturers, and the “effective date” 

for purposes of modifying the Code of Federal Regulations.

See Natural Resources Defense Council v. Abraham, 355 F.3d 

179, 202 (2d Cir. 2004).

The Office of Federal Register (OFR) uses the term 

“effective date” to describe the date that amendments in a 

rulemaking document affect the current Code of Federal 

Regulations. See Federal Register Document Drafting 
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Handbook, at p. 2-10 (Oct. 10, 1998). However, OFR draws a 

contrast between such a date and the compliance or 

applicability date of a rule, which is described as “the 

date that the affected person must start following the 

rule.” Id. at 2-11. Thus, the “effective date” of a 

regulation is commonly used to describe the date by which a 

provision in the Code of Federal Regulations is enacted as 

law, but it is not necessarily the same as the time when 

provision enacted in the Code of Federal Regulations is 

operative on the regulated activity or entity. The latter 

may be described as the “compliance,” “applicability,” or 

“takes effect” date. 

The terms of the CAA also recognize a similar 

distinction in some instances. Section 112(i)(3)(A) of the 

CAA provides that “after the effective date of any 

emissions standard, limitation or regulation promulgated 

under this section and applicable to a source, no person 

may operate such source in violation of such standard, 

limitation, or regulation except, in the case of an 

existing source, the Administrator shall establish a 

compliance date or dates for each category or subcategory 

of existing sources, which shall provide for compliance as 

expeditiously as practicable, but in no event later than 3 

years after the effective date of such standard.” Another 
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example in section 202 of the Act is discussed in more 

detail below. 

Another formulation may be found in Section 553(c) of 

the APA (5 U.S.C. §553(c)), which provides, with some 

exceptions, that “[t]he required publication or service of 

a substantive rule shall be made not less than 30 days 

before its effective date.” The APA does not define the 

term “effective date” or make precisely clear whether it is 

referring to the date a regulation has the force of law or 

the date by which a regulatory requirement applies to a 

regulated entity or activity. The APA also separately 

recognizes the concept of finality of Agency action for 

purposes of judicial review. See 5 U.S.C. §704. 

In the October 7, 2009 notice, EPA did not clearly 

distinguish between the various forms of the date when a 

regulatory requirement may become effective. One commenter

observed that the EPA analysis in the proposed 

reconsideration appeared to blur the distinction between 

the “effective date” set by EPA and the date that Congress 

allows a regulation to become effective under the CRA. EPA 

in fact discussed all of these concepts in its notice, with 

part of the discussion focused on the date a regulation 

becomes “final” and “effective” and a part on when a 

regulation may “take effect” under the CRA. EPA viewed 
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these forms of the date when a regulation becomes 

“effective” to be essentially the same, but the case law 

suggests that administrative agencies do not necessarily 

need to harmonize the date that regulatory requirements 

take effect with the “effective date” of a regulation, 

meaning the date a regulation has the force of law and 

amends the Code of Federal Regulations. Since these are 

distinct concepts, the effective date of a regulation for 

purposes of amending the CFR may precede the date when a 

regulatory requirement “takes effect” or when a regulated 

entity must comply with a regulatory requirement. A

regulation may “take effect” subsequent to its stated 

“effective date” where it has been published in final form 

but does not require immediate implementation by the agency 

or compliance by regulated entities. 

The key issue raised by EPA in the October 7, 2009 

notice was determining which date should be determined by 

EPA to be the date when a pollutant becomes “subject to 

regulation” and, thus, the date when the requirements of 

the PSD permitting program apply to that pollutant. In 

recognition of the distinction between the “effective date” 

of the regulation for purposes of amending the CFR and the 

point at which a regulatory restriction may “take effect,” 

EPA has considered whether it is permissible to construe 
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section 165(a)(4) and 169(3) of the CAA to mean that a 

pollutant becomes “subject to regulation” at the point that 

a regulatory restriction or control “takes effect.” In the 

October notice, EPA observed that the use of “subject to” 

in the Act suggests that PSD requirements are intended to 

be triggered when those standards become effective for the 

pollutant. We also said that no party is required to 

comply with a regulation until it has become final and 

effective. Prior to that date, an activity covered by a 

rule is not in the ordinary sense “subject to” any 

regulation. Regardless of whether one interprets 

regulation to mean monitoring or actual control of 

emissions, prior to the effective date of a rule there is 

no regulatory requirement to monitor or control emissions.

The same reasoning applies to the date that a 

regulation “takes effect,” as that term is used in the 

judicial decisions described above. Regulated entities are 

not required to comply with a regulation until it takes 

effect. Prior to the date a regulation takes effect, the 

activity covered by a regulation is not in the ordinary 

sense subject to any regulation. 

As discussed in the PSD Interpretive Memo, as used in 

the context of the PSD provisions in EPA regulations and 

the CAA, EPA interprets the term “regulation” to mean the 
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act or process of controlling or restricting an activity. 

This interpretation applies a common meaning of the term 

regulation reflected in dictionaries. 

Thus, EPA agrees with public commenters that the term 

“subject to regulation” used in both the CAA and EPA’s 

regulations may be construed to mean the point at which a 

requirement to control a pollutant takes effect. The CAA 

does not necessarily preclude construing a pollutant to 

become subject to regulation upon the promulgation date or 

the date that a regulation becomes final and effective for 

purposes of judicial review. However, EPA has been 

persuaded by public comments that the phrase “subject to 

regulation” may also be interpreted to mean the date by 

which a control requirement takes effect.

Indeed, EPA has concluded that the latter 

interpretation is more consistent with the Actual Control 

Interpretation reflected in the PSD Interpretive Memo. As 

one commenter observed, a regulation would have to have 

become actually effective, in the sense that actual legal 

obligations created by the regulation have become currently 

applicable for regulated entities and are no longer merely 

prospective obligations, before that regulation could make 

a pollutant subject to actual control. Another commenter 

noted that a regulated entity has no immediate compliance 
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obligations and cannot be held in violation of the 

regulation until a legal obligation becomes applicable to 

them on the “takes effect” date. Thus, based on this 

reasoning, EPA has decided that it will construe the point 

at which a pollutant becomes “subject to regulation” within 

the meaning of section 52.21(b)(50)(iv) of EPA’s 

regulations to be when a control or restriction is 

operative on the activity regulated. EPA agrees with 

commenters that there is generally no legally enforceable 

obligation to control a pollutant when a regulation is 

promulgated or, in some instances, even when a regulation 

becomes effective for some purposes.

Thus, EPA currently interprets the time that a 

pollutant becomes a “regulated NSR pollutant” under section 

52.21(b)(50)(iv) to be the time when a control or 

restriction on emissions of the pollutant takes effect or 

becomes operative on the regulated activity. Given EPA’s 

conclusion that this is a permissible interpretation of the 

“subject to regulation” language in sections 165(a)(4) and 

169(3) of the CAA, we will also interpret other parts of 

section 52.21(b)(50) to make a pollutant a regulated NSR 

pollutant on the date that a control requirement takes 

effect, provided such an interpretation is not inconsistent 

with the existing language of the regulations. 
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EPA does not agree with several commenters who 

suggested that EPA determine that a pollutant does not 

become subject to regulation until the time that an 

individual source engages in the regulated activity. EPA 

does not believe such a reading is consistent with the 

“subject to regulation” language in the CAA. Even if no 

source is actually engaged in the activity, once a standard 

or control requirement has taken effect, no source may 

engage in the regulated activity without complying with the 

standard. At this point, the regulated activity and the 

emissions from that activity are controlled or restricted, 

thus being subject to regulation within the common meaning 

of the term regulation used in EPA’s regulations and 

section 165(a)(4) and 169(3) of the CAA.

Likewise, EPA does not agree with commenters who 

argued that a pollutant does not become subject to 

regulation until the date when a source must certify 

compliance with regulatory requirements or submit a 

compliance report. In some instances, a compliance report 

or certification of compliance may not be required until 

well after the point that a regulation operates to control 

or restrict the regulated activity. Thus, EPA does not 

feel that it would be appropriate as a general rule to 

establish the date when a source certifies compliance or 
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submits its compliance report as the date that a pollutant 

becomes subject to regulation.

Since the fourth part of the definition of “regulated 

NSR pollutant” functions as a catch-all provision, it may 

cover a variety of different types of control requirements 

established by EPA under the CAA. These different types of 

regulations may contain a variety of different mechanisms 

for controlling emissions and have varying amounts of lead 

time before controls take effect under the particular 

regulatory framework. Thus, whenever the Agency adopts 

controls on a new pollutant under a portion of the CAA

covered by the fourth part of the definition, EPA 

anticipates that it will be helpful to states and regulated 

sources for EPA to identify the date when a new pollutant 

becomes subject to regulation. In section IV.A of this 

notice, EPA provides such an analysis for the forthcoming 

LDV Rule that will establish the first controls on GHGs.EPA 

has also concluded that it is appropriate to extend the 

reasoning of this interpretation across all parts of the 

definition of the term “regulated NSR pollutant.” The 

reasoning described above is equally applicable to the 

regulation of additional pollutants under the specific 

sections of the Act delineated in the first three parts of 

the definition of “regulated NSR pollutant.” While the 
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date a control requirement may take effect could vary 

across sections 109, section 111, and Title VI, we do not 

see any distinction in the applicability of the legal 

reasoning above to these provisions of the CAA. There 

should be less variability among rules promulgated under 

the same statutory section, so EPA does not expect that it 

will be necessary for EPA to identify the date that a new 

pollutant becomes subject to regulation each time EPA 

regulates a new pollutant in a NAAQS or NSPS. EPA can more 

readily identify the specific dates when controls under 

such rules take effect. 

By way of example, the NSPS under section 111 of the 

Act preclude operation of a new source in violation of such 

a standard after the effective date of the standard. See

42 U.S.C. §7411(e). Thus, an NSPS takes effect on the 

effective date of the rule. Once such a standard takes 

effect and operates to preclude operations in violation of 

the standards, then EPA interprets the statute and EPA’s 

PSD regulations to also require that the BACT requirement 

apply to a pollutant that is subject to NSPS. Consistent 

with our October 7, 2009 proposal, EPA has determined that 

the existing language in section 52.21(b)(50)(ii) of its 

regulations may be construed to apply to a new pollutant 

upon the effective date of an NSPS. This part of the 
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definition covers “[a]ny pollutant that is subject to any 

standard promulgated under section 111 of the Act.” 40 CFR 

52.21(b)(50)(ii). While the word “promulgated” appears in 

this part of the definition, this term modifies the term 

“standard” and does not directly address the timing of PSD 

requirements. Under the language in this part of the 

definition, the PSD requirements apply when a pollutant 

becomes “subject to” the underlying standard, which is 

“promulgated under” section 111 of the Act. Thus, this 

language can be interpreted to make an NSPS pollutant a 

regulated NSR pollutant upon the effective date of an NSPS. 

EPA did not receive any public comments that opposed 

reading this portion of the definition to invoke PSD 

requirements upon the effective date of an NSPS. This can 

logically be extended to be consistent with the general 

view described above that the time a pollutant becomes

subject to regulation is the time when a control 

requirement “takes effect.” As discussed above, the 

effective date of an NSPS is also that date when the 

controls in an NSPS “take effect.” 

Likewise, under section 169(a)(3) of the Act, a source 

applying for a PSD permit must demonstrate that it will not 

cause or contribute to a violation of the NAAQS in order to

obtain the permit. Once a NAAQS is effective with respect 
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to a pollutant, the standard operates through section 

169(a)(3) of the Act and section 52.21(k) of EPA’s 

regulations to preclude construction of a new source that 

would cause or contribute to a violation of such standard. 

Using the effective date of a NAAQS to determine when 

a pollutant covered by a NAAQS becomes a regulated NSR 

pollutant is more consistent with EPA’s general approach 

for determining when a new NAAQS applies to pending permit 

applications. EPA generally interprets a revised NAAQS 

that establishes either a lower level for the standard or a 

new averaging time for a pollutant already regulated to 

apply upon the effective date of the revised NAAQS. Thus, 

unless EPA promulgates a grandfathering provision that 

allows pending applications to apply standards in effect 

when the application is complete, a final permit decision 

issued after the effective date of a NAAQS must consider 

such a NAAQS. As described above, the effective date of 

the NAAQS is also the date a NAAQS takes effect through the 

PSD permitting program to regulate construction of a new or 

modified source.

Since a NAAQS covering a new pollutant would operate 

through the PSD permitting program to control emissions of 

that pollutant from the construction or modification of a 

major source upon the effective date of the NAAQS, a NAAQS 
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covering a new pollutant takes effect on the effective date 

of the regulation promulgating the NAAQS. EPA does not 

agree with one commenter’s suggestion that such a NAAQS 

would not take effect until the time a state first 

promulgates limitations for the pollutant in a SIP. Under 

section 165(a)(3) of the Act and the federal PSD permitting 

regulations at 52.21(k), to obtain a PSD permit, a major 

source must demonstrate that the proposed construction will 

not cause or contribute to a violation of a NAAQS. Due to 

these requirements, the PSD program operates to incorporate 

the NAAQS as a governing standard for permitting 

construction of large sources. Thus, under the federal PSD 

program regulations at least, a new pollutant covered by a 

NAAQS becomes subject to regulation at a much earlier date. 

These PSD provisions require emissions limitations for the 

NAAQS pollutant before construction at a major source may 

commence and thereby function to protect the NAAQS from new 

source construction and modifications of existing major 

sources in the SIP development period before a completion 

of the planning process necessary to determine whether 

additional standards for a new NAAQS pollutant need to be 

developed. The timing when the NAAQS operates in this 

manner under SIP-approved programs is potentially more 

nuanced and depends on whether state laws are sufficiently 
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open-ended to call for application of a new NAAQS as a 

governing standard for PSD permits upon the effective date. 

EPA believes that state laws that use the same language as

in EPA’s PSD program regulations at 52.21(k) and 51.166(k) 

are sufficiently open-ended and allow such a NAAQS to “take 

effect” through the PSD program upon the effective date of 

the NAAQS. Notwithstanding this complexity in SIP-approved 

programs, the applicability of the federal PSD program 

regulations to a new NAAQS pollutant upon the effective 

date of the NAAQS is sufficient to determine that a new 

pollutant is subject to regulation on this date.

In the October 7, 2009 notice, EPA observed that one 

portion of its existing regulations was not necessarily 

consistent with this reading of the CAA. For the first 

class of pollutants described in the definition of 

“regulated NSR pollutant,” the PSD requirements apply once 

a “standard has been promulgated” for a pollutant or its 

precursors. See 40 CFR 52.21(b)(50)(i). The use of “has 

been” in the regulation indicates that a pollutant becomes 

a "regulated NSR pollutant," and hence PSD requirements for 

the pollutant are triggered, on the date a NAAQS is 

promulgated. Thus, EPA observed in the October 7, 2009 

notice that it may not be possible for EPA to read the 

regulatory language in this provision to make PSD 
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applicable to a NAAQS pollutant upon the effective date of 

the NAAQS. EPA did not propose to modify the language in 

40 CFR 52.21(b)(50)(i) in the October 2009 notice because 

EPA had not yet reached a final decision to interpret the

CAA to mean that a pollutant is subject to regulation on 

the date a regulatory requirement becomes effective. Since 

EPA was not proposing to establish a NAAQS for any 

additional pollutants, the timing of PSD applicability for 

a newly identified NAAQS pollutant did not appear to be of 

concern at the time. No public comments on the October 

2009 notice addressed this issue. Since EPA is now 

adopting a variation of the proposed interpretation with 

respect to the timing of PSD applicability, we believe it 

will be appropriate to propose a revision of the regulatory 

language in section 52.21(b)(50)(i) at such time as EPA may 

consider promulgation of a NAAQS for an additional 

pollutant. Until that time, however, EPA will continue to 

apply the terms of section 52.21(b)(50)(i) of the 

regulation. This is permissible because, even though EPA 

believes the better reading of the Act is to apply PSD upon 

the date that a control requirement “takes effect,” the 

Agency has not determined in this action that the Clean Air 

Act precludes applying PSD requirements upon the 

promulgation of a control requirement. 
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IV. Application of PSD Interpretive Memo to PSD Permitting 

for GHGs

A. Date by Which GHGs Will Be “Subject to Regulation”

Although the PSD Interpretive Memo and this 

reconsideration reflects a broad consideration of the most 

appropriate legal interpretation and policy for all 

pollutants regulated under the CAA, the need to clarify 

this issue as a general matter has been driven by concerns 

over the effects of GHG emissions on global climate and the 

contention made by some parties in permit proceedings that 

EPA began regulating CO2 as early as the promulgation of 

monitoring and reporting requirements in EPA’s Part 75 

rules to implement section 821 of the CAA Amendments of

1990. The vast majority of public comments on the October 

7, 2009 notice focused on the regulation of GHGs under the 

PSD program. As a result, EPA recognizes that it is 

critically important at this time for the Agency to make 

clear when the requirements of the PSD permitting program 

for stationary sources will apply to GHGs. For the reasons 

discussed below, GHGs will become “subject to regulation”

under the CAA on January 2, 2011, assuming that EPA issues 

final GHG emissions standards under section 202(a) 

applicable to model year 2012 new motor vehicles as 

proposed. As a result, with that assumption, the PSD 
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permitting program would apply to GHGs on that date. 

However, as described above, the Tailoring Rule proposed 

various options for phasing in PSD requirements for sources 

emitting GHGs in various amounts above 100 or 250 tons per 

year. Since EPA has not yet completed that rulemaking, 

today’s action concludes only that, under the approach 

envisioned for the vehicle standards, GHGs would not be 

considered “subject to regulation” (and no source would be 

subject to PSD permitting requirements for GHGs) earlier 

than January 2, 2011. The final Tailoring Rule will

address the applicability of PSD requirements for GHGemitting sources that are not presently subject to PSD 

permitting.

EPA’s determination that PSD will begin to apply to 

GHGs on January 2, 2011 is based on the following 

considerations: (1) the overall interpretation reflected in 

the PSD Interpretive Memo; (2) EPA’s conclusion in this 

notice that a pollutant becomes subject to regulation when 

controls “take effect,” and (3) the assumption that the 

agency will establish emissions standards for model year 

2012 vehicles when it completes the proposed LDV Rule. 

As proposed, the LDV Rule consists of two kinds of 

standards — fleet average standards determined by the 

emissions performance of a manufacturer’s fleet of various 
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models, and separate vehicle standards that apply for the 

useful life of a vehicle to the various models that make up 

the manufacturer’s fleet. CAA section 203(a)(1) prohibits 

manufacturers from introducing a new motor vehicle into 

commerce unless the vehicle is covered by an EPA-issued 

certificate of conformity for the appropriate model year. 

Section 206(a)(1) of the CAA describes the requirements for 

EPA issuance of a certificate of conformity, based on a 

demonstration of compliance with the emission standards 

established by EPA under section 202 of the Act. A 

certification demonstration requires emission testing, and 

must be done for each model year. 

The certificate covers both fleet average and vehicle 

standards, and the manufacturer has to demonstrate 

compliance with both of these standards for purposes of 

receiving a certificate of conformity. The demonstration 

for the fleet average is based on a projection of sales for 

the model year, and the demonstration for the vehicle 

standard is based on emissions testing and other 

information. 

Both the fleet average and vehicle standards in the 

LDV Rule will require that automakers control or limit GHG 

emissions from the tailpipes of these vehicles. As such, 

they clearly constitute “regulation” of GHGs under the 
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interpretation in the PSD Interpretive Memo. This view is 

consistent with the position originally expressed by EPA in 

1978 that a pollutant regulated in a Title II regulation is 

a pollutant subject to regulation. See 42 FR at 57481. 

However, the regulation of these pollutants will not 

actually take effect upon promulgation of the LDV Rule or 

on the effective date of the LDV Rule when the provisions 

of the rule are incorporated into the Code of Federal 

Regulations. 

Under the LDV Rule, the standards for GHG emissions 

are not operative until the 2012 model year, which may 

begin as early as January 2, 2012. In accordance with the 

requirements of Title II of the CAA and associated 

regulations, vehicle manufacturers may not introduce a 

model year 2012 vehicle into commerce without a model year 

2012 certificate of conformity. CAA Section 203(a)(1). A 

model year 2012 certificate only applies to vehicles 

produced during that model year, and the model year 

production period may begin no earlier than January 2, 

2011. See Section 202(b)(3)(A) of the CAA and implementing 

regulations at 40 CFR §85.2302 through 85.2305. Thus a 

vehicle manufacturer may not introduce a model year 2012 

vehicle into commerce prior to January 2, 2011 
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There will be no controls or limitations on GHG 

emissions from model year 2011 vehicles. The obligation on 

an automaker for a model year 2012 vehicle would be to have 

a certificate of conformity showing compliance with the 

emissions standards for GHGs when the vehicle is introduced 

into commerce, which can occur on or after January 2, 2011. 

Therefore the controls on GHG emissions in the Light Duty 

Rule will not take effect until the first date when a 2012 

model year vehicle may be introduced into commerce. In 

other words, the compliance obligation under the LDV Rule 

does not occur until a manufacturer may introduce into 

commerce vehicles that are required to comply with GHG 

standards, which will begin with MY 2012 and will not occur 

before January 2, 2011. Since section 203(a)(1) of the CAA 

prohibits manufacturers from introducing a new motor 

vehicle into commerce unless the vehicle is covered by an 

EPA-issued certificate of conformity for the appropriate 

model year, as of January 2, 2011, manufacturers will be 

precluded from introducing into commerce any model year 

2012 vehicle that has not been certified to meet the 

applicable standards for GHGs. 

This interpretation of when the GHG controls in the 

LDV Rule take effect, and therefore, make GHGs subject to 

regulation under the Act for PSD purposes, is consistent 
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with the statutory language in section 202(a)(2) of the 

CAA. This section provides that “any regulation prescribed 

under paragraph (1) of this subsection (and any revision 

thereof) shall take effect after such period as the 

Administrator finds necessary to permit the development and 

application of the requisite technology, giving appropriate 

consideration to the cost of compliance within such 

period.” See 42 U.S.C. 7521(a)(2) (emphasis added). The 

final LDV Rule will apply to model years 2012 through 2016. 

The time leading up to the introduction of model year 2012 

is the time that EPA “finds necessary to permit the 

development and application of the requisite technology, 

giving appropriate consideration to the cost of compliance 

within such period.” Model year 2012 is therefore when the 

GHG standards in the rule “take effect.” 

EPA does not agree with several commenters who have 

suggested that the GHG standards in the LDV Rule do not 

take effect until October 1, 2011. The latter date appears 

to be based on how the National Highway Traffic Safety 

Administration (NHTSA) determines the beginning of the 2012 

model year under the Energy Policy and Conservation Act 

(EPCA). Under EPCA, a more stringent CAFE standard must be 

prescribed by NHTSA at least 18 months before the beginning 

of the model year. For purposes of this EPCA provision, 
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NHTSA has historically construed the beginning of the model 

year to be October 1 of the preceding calendar year. See

49 U.S.C. §32902(g)(2); 74 FR 49454, 49644 n.447 (Sep. 28, 

2009). Although EPA has endeavored to harmonize its 

section 202(a) standards with the NHTSA CAFE standards, 

EPA’s standards are promulgated under distinct legal 

authority in the CAA. Thus, the section 202(a) standards 

promulgated in the LDV Rule are not subject to EPCA or 

NHTSA’s interpretation of when a model year begins for 

purposes of EPCA. Under EPA’s planned LDV regulations, 

model year 2012 vehicles may be introduced into commerce as 

early as January 2, 2011. Although as a practical matter, 

some U.S. automakers may not begin introducing model year 

2012 vehicles into commerce until later in 2011, they may 

nevertheless do so as early as January 2, 2011 under EPA’s 

regulations. Consistent with the discussion above, EPA 

construes the phrase “subject to regulation” in section 

165(a)(4) and 169(3) of the Act to mean that the BACT 

requirement applies when controls on a pollutant first 

apply to a regulated activity, and not the point at which 

an entity first engages in the regulated activity. In this 

instance, the regulated activity is the introduction of 

model year 2012 vehicles into commerce. As of January 2, 
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2011, a manufacturer may not engage in this activity 

without complying with the applicable GHG standards. 

Likewise, EPA does not agree with public commenters 

who argued that EPA should not consider the GHG controls in 

the LDV Rule to take effect until automakers have to 

demonstrate compliance with the fleet average standards at 

the end of the model year, based on actual vehicle model 

production. As discussed above, the LDV Rule includes both 

fleet average standards and vehicle standards that apply to 

individual vehicles throughout their useful lives. As 

discussed above, both of these standards for GHG emissions 

are operative on model year 2012 vehicles introduced into 

commerce on or after January 2, 2011. Thus, controls on 

GHG emissions from automobiles will take effect prior to 

the date that a manufacturer must demonstrate compliance 

with the fleet average standards. The fact that the 

manufacturer demonstrates final compliance with the fleet 

average at a later date, based on production for the entire 

year, does not change the fact that their conduct was 

controlled by both the fleet average and the vehicle 

standards, and subject to regulation, prior to that date.

B. Implementation Concerns

A substantial number of commenters requested that EPA 

defer application of the PSD program requirements to 
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greenhouses gases based on various practical implementation 

considerations, and several of these comments argued that 

the CAA affords EPA the discretion to set an implementation 

date based on such concerns. EPA agrees that application 

of PSD program requirements to GHGs presents several 

significant implementation challenges for EPA, states and 

other entities that issue permits, and the sources that 

must obtain permits. Indeed, many of the public comments 

have illustrated the magnitude of the challenge beyond what 

is described in the notices on reconsideration of the PSD 

Interpretive Memo and the Tailoring Rule. In recognition 

of the substantial challenges associated with incorporating 

GHGs into the PSD program, EPA’s preference would be to 

establish a specific date when PSD permitting requirements 

apply to GHGs based solely on these practical 

implementation considerations. However, we have not been 

persuaded that the terms of the CAA afford EPA the 

discretion to proceed in this manner. 

As recognized by the Supreme Court, the CAA affords 

EPA “significant latitude as to the manner, timing, 

content, and coordination of its regulations” on GHGs. 

Massachusetts v. EPA, 549 U.S. 497, 533 (2007). However, 

the Supreme Court made this observation in the context of a 

petition requesting that EPA promulgate regulations to 
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control GHG emissions from new motor vehicles. The Court 

did not consider the particular provisions of the PSD 

program in Part C of the Act. With respect to the PSD 

program in particular, once EPA has determined to regulate 

a pollutant and such regulation is operative on the 

regulated activity, the terms of the CAA do not clearly 

afford EPA the discretion to defer application of PSD 

program requirements for a pollutant that is “subject to 

regulation” under the CAA. Thus, while EPA may have 

discretion as to the manner and time for regulating GHG

emissions under the CAA, once a pollutant is regulated in 

some form under the Act, the terms of the Act make clear 

that the PSD program is applicable. 

As noted in the PSD Interpretive Memo, given the way 

Congress drafted sections 165(a)(4) and 169(3) of the Act, 

it is apparent that Congress intended for EPA to determine 

the applicability of the BACT requirement on the basis of 

decisions to regulate particular pollutants under other 

parts of the Act. These other provisions in the Act that 

authorize EPA to establish emissions limitations or 

controls on emissions provide criteria for the exercise of

EPA’s judgment to determine which pollutants or source 

categories to regulate. See, e.g., 42 U.S.C. 

§7408(a)(1)(A); 42 U.S.C. §7411(b)(1)(A); 42 U.S.C. 
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§7521(a)(1). Furthermore, some of these provisions, such 

as section 202(a), expressly provide for EPA to consider an 

appropriate lead time for when standards may take effect. 

In contrast, sections 165(a)(4) and 169(3) provide no such 

authority for EPA to defer application of the PSD 

permitting requirements based on implementation 

considerations. Thus, it follows that Congress intended 

that pollutants would be regulated for purposes of the PSD 

program as soon a regulation requiring control of the 

pollutant takes effect under other parts of the Act. 

Although the term “pollutant subject to regulation” is 

ambiguous in certain other respects (as discussed earlier), 

the Agency does not construe the language of the CAA to 

provide the Agency with the discretion to choose a date 

when PSD program requirements apply based on the 

implementation considerations for the PSD program. 

Nevertheless, given the substantial magnitude of the 

PSD implementation challenges presented by the regulation 

of GHGs, EPA believes that there is an administrative 

necessity that the Agency temporarily limit the scope of 

sources covered by the PSD program to ensure that 

permitting authorities can effectively implement it. EPA 

further believes that not limiting that scope would produce 

the absurd result of subjecting many sources to PSD that
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Congress clearly did not envision would be covered by the 

program. As mentioned above, this action to limit the 

scope of the programs is the subject of a separate EPA 

rulemaking, known as the Tailoring Rule. In comment on 

that action, as well as in comments on the PSD Interpretive

Memo reconsideration notice, EPA received numerous 

suggestions that it is necessary to limit the scope of 

sources covered at the time GHGs become subject to 

regulation. Commenters further stated that it is necessary 

to select a “trigger date” for permitting that takes into 

account the time needed for permitting authorities to adopt 

any scope-limiting measures (including the need to amend 

State law), to secure the necessary additional financial 

and other resources, and to hire and train the staff needed 

to respond to the increase in permitting workload. These 

comments make clear that more time will be needed beyond 

January 2, 2011 before permitting of many GHG stationary 

sources can begin. Thus, EPA will be taking additional 

action in the near future in the context of the Tailoring 

Rule to address GHG-specific circumstances that will exist 

beyond January 2, 2011.

C. Interim EPA Policy to Mitigate Concerns Regarding GHG 

Emissions from Construction or Modification of Large 

Stationary Sources
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While EPA has concluded that GHGs will not become 

subject to regulation (and hence the PSD BACT requirement 

will not apply to these pollutants) until January 2, 2011, 

permitting authorities that issue permits before January 2, 

2011 are already in a position to, and should, use the 

discretion currently available under the BACT provisions of 

the PSD program to promote technology choices for control 

of criteria pollutants that will also facilitate the 

reduction of GHG emissions. More specifically, the CAA 

BACT definition requires permitting authorities selecting 

BACT to consider the reductions available through 

application of not only control methods, systems, and 

techniques, but also through production processes, and 

requires them to take into account energy, environmental, 

and economic impacts. Thus, the statute expresses the need 

for a comprehensive review of available pollution control 

methods when evaluating BACT that clearly requires 

consideration of energy efficiency. The consideration of 

energy efficiency is important because it contributes to 

reduction of pollutants to which the PSD requirements 

currently apply and have historically been applied. We 

further note that, although BACT does not now apply to GHG, 

BACT for other pollutants can, through application of more 
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efficient production processes, indirectly result in lower 

GHG emissions. 

Neither the statute nor EPA regulations specify 

precisely how to address energy efficiency in BACT 

determinations, nor have we fully articulated how to take 

climate considerations into account under the “energy, 

environmental, and economic impacts” considerations of 

BACT. Further, while our BACT guidance for currently 

regulated pollutants has addressed some facets of these 

issues, we believe that, given the potential importance of 

the indirect GHG benefits, it will be useful for EPA to 

summarize this guidance and further clarify it as necessary 

in order to further illustrate where PSD permitting 

authorities should be using existing BACT authority for 

pollutants that are presently regulated in ways that can 

indirectly address concerns about GHG emissions from large 

stationary sources. We are developing such guidance and 

plan to issue it in the near future.

D. Transition for Pending Permit Applications

In light of EPA’s conclusion that pollutants become 

subject to regulation for PSD purposes when control 

requirements on that pollutant take effect and that such 

requirements will not take effect for GHGs until January 2, 

2011, EPA does not see any grounds to establish a 
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transition period for permit applications that are pending 

before GHGs become subject to regulation. As a general 

matter, permitting and licensing decisions of regulatory 

agencies must reflect the law in effect at the time the 

agency makes a final determination on a pending 

application. See Ziffrin v. United States, 318 U.S. 73, 78 

(1943); State of Alabama v. EPA, 557 F.2d 1101, 1110 (5th

Cir. 1977); In re: Dominion Energy Brayton Point, LLC, 12 

E.A.D. 490, 614-616 (EAB 2006); In re Phelps Dodge Corp., 

10 E.A.D. 460, 478 n. 10 (EAB 2002). Thus, in the absence 

of an explicit transition or grandfathering provision in 

the applicable regulations, each PSD permit issued on or 

after January 2, 2011 must contain provisions that satisfy 

the BACT and other requirements for GHGs that will apply as 

of that date.

Under certain circumstances, EPA has previously 

allowed proposed new major sources and major modifications 

that have submitted a complete PSD permit application 

before the effective date of an amendment to the PSD 

regulations, but have not yet received a final and 

effective PSD permit, to continue relying on information 

already in the application rather than immediately having 

to amend applications to demonstrate compliance with the 

new PSD requirements. In such a way, these proposed 
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sources and modifications were “grandfathered” or exempted 

from the new PSD requirements that would otherwise have 

applied to them.

For example, EPA adopted a grandfathering provision 

when it changed the indicator for the particulate matter 

NAAQS from total suspended particulate matter (TSP) to 

particulate matter less than 10 microns (PM10). The 

federal PSD regulations at 40 CFR 52.21(i)(1)(x) provide 

that the owners or operators of proposed sources or 

modifications that submitted a complete permit application 

before July 31, 1987, but did not yet receive the PSD 

permit, are not required to meet the requirements for PM10, 

but could instead satisfy the requirements for TSP that 

were previously in effect.

 In addition, EPA has allowed some grandfathering for 

permit applications submitted before the effective date of 

an amendment to the PSD regulations establishing new 

maximum allowable increases in pollutant concentrations 

(also known as PSD increments). The federal PSD 

regulations at 40 CFR 52.21(i)(10) provide that proposed 

sources or modifications that submitted a complete permit 

application before the effective date of the increment in 

the applicable implementation plan are not required to meet 

the increment requirements for PM10, but could instead 
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satisfy the increment requirements for TSP that were 

previously in effect. Also, 40 CFR 52.21(i)(9) provides 

that sources or modifications that submitted a complete 

permit application before the provisions embodying the 

maximum allowable increase for nitrogen oxides (the NO2

increments) took effect, but did not yet receive a final 

and effective PSD permit, are not required to demonstrate 

compliance with the new increment requirements to be 

eligible to receive the permit.

Under the particular circumstances presented by the 

forthcoming application of PSD requirements to GHGs, EPA 

does not see a justification for adopting an explicit 

grandfathering provision of the nature described above. 

Permit applications submitted prior to the publication of 

this notice should in most cases be issued prior to January 

2, 2011 and, thus, effectively have a transition period of 

nine months to complete processing before PSD requirements 

become applicable. Additional time for completion of 

action on applications submitted prior to the onset of PSD 

requirements for GHGs therefore does not appear warranted 

to ensure a smooth transition and avoid delays to pending 

applications. To the extent any pending permit review 

cannot otherwise be completed within the next nine months 

based on the requirements for pollutants other than GHGs, 
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it should be feasible for permitting authorities to begin 

incorporating GHG considerations into permit reviews in 

parallel with the completion of work on other pollutants 

without adding any additional delay to permit processing. 

Furthermore, the circumstances surrounding the onset 

of requirements for GHGs are distinguishable from prior 

situations where EPA has allowed grandfathering of 

applications that were deemed complete prior to the 

applicability of revision to PSD permitting regulation. 

First, this action and the PSD Interpretive Memo does not 

involve a revision of the PSD permitting regulations but 

rather involves clarifications of how EPA interprets the 

existing regulatory text that explicitly articulate what 

has, in most respects, been EPA’s longstanding practice. 

It has been EPA’s consistent position since 1978 that 

regulation of a pollutant under Title II triggers PSD 

requirements for such a pollutant. See 42 FR 57481. Thus, 

permitting authorities and permit applicants could 

reasonably anticipate that completion of the LDV Rule would 

trigger PSD and prepare for this action. Many commenters 

interpreted EPA’s October 7, 2009 notice as proposing to 

trigger PSD requirements within 60 days of the promulgation 

of the LDV Rule rather than the January 2, 2011 date that 

EPA has determined to be the date the controls in that rule 
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take effect. Second, there are presently no regulatory 

requirements in effect for GHGs. On the other hand, at the 

time EPA moved from using TSP to using PM10 as the 

indicator for the particulate matter NAAQS, grandfathered 

sources were still required to satisfy PSD requirements for 

particulate matter based on the TSP indicator. Likewise, 

when EPA later updated the PSD increment for particulate 

matter to use the PM10 indicator, the grandfathered sources 

were still required to demonstrate that they would not 

cause or contribute to a violation of the particulate 

matter increment based on TSP. In the case of the adoption 

of the NO2 increment, grandfathered sources were still 

required to demonstrate that they would not cause or 

contribute to a violation of the NO2 NAAQS. In contrast, 

for GHGs, there are no measures currently in effect that 

serve to limit emission of GHGs from stationary source.

For these reasons, EPA does not intend to promulgate a 

transition or grandfathering provision that exempts pending 

permit applications from the onset of GHG requirements in 

the PSD program. As discussed above, in the absence of 

such a provision, PSD permits that are issued on or after 

January 2, 2011 (in accordance with limitations promulgated 

in the upcoming Tailoring Rule) will be required to contain 
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provisions that fulfill the applicable program requirements

for GHGs.

V. PSD Program Implementation by EPA and States

Consistent with the PSD Interpretive Memo, the refined 

interpretation reflected in this notice (that a pollutant 

subject to actual control becomes subject to regulation at 

the time such controls take effect) is an interpretation of 

the language in 40 CFR 52.21(b)(50) of EPA’s regulations. 

EPA will apply the PSD Interpretive Memo, with the 

refinement described above, when implementing the federal 

permitting program under 40 CFR 52.21. Furthermore, we will 

expect that states that implement the federal PSD permit 

program under delegation from an EPA Regional Office will 

do the same. 

In addition, EPA will apply the interpretation 

reflected in this notice and the PSD Interpretive Memo in 

its oversight of existing state programs and review and 

approval of new program submissions. Many states implement 

the PSD program pursuant to state laws that have been 

approved by EPA as part of the State Implementation Plan 

(SIP), pursuant to a determination by EPA that such laws 

meet the PSD program criteria set forth in 40 CFR 51.166. 

The EPA regulation setting forth PSD program requirements 

for SIPs also includes the same definition of the term 
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“regulated NSR pollutant” as the federal program 

regulation. See 40 CFR 51.166(b)(49). Because this 

regulation uses the same language as 40 CFR 52.21 and the 

same considerations apply to implementation of the PSD 

program under state laws, EPA will interpret section 

51.166(b)(49) in the same manner as section 52.21(b)(50). 

However, in doing so, EPA will be mindful that permitting 

authorities in SIP approved states have some independent 

discretion to interpret state laws, provided those 

interpretations are consistent with minimum requirements 

under the federal law. 

To the extent approved SIPs contain the same language 

as used in 40 CFR 52.21(b)(50) or 40 CFR 51.166(b)(49), 

SIP-approved state permitting authorities may interpret 

that language in state regulations in the same manner 

reflected in the PSD Interpretive Memo and this notice. As 

discussed above and in the PSD Interpretive Memo, since 

EPA’s interpretation is permissible under the CAA, the 

states may follow it as well. However, EPA will not seek 

to preclude actions to address GHGs in PSD permitting 

actions prior to January 2, 2011 where a state permitting 

authority feels it has the necessary legal foundation and 

resources to do so. 
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EPA has not called on any states to make a SIP 

submission that addresses the interpretive issues addressed 

in this notice and the PSD Interpretive Memo. To the 

extent the PSD Interpretive Memo, and the refinement to 

that interpretation reflected in this notice, was not 

previously established by the Agency prior to the approval 

of the PSD program elements of a particular SIP, the PSD 

Interpretive Memo and the interpretation in this notice do 

not apply retroactively to prior approvals of state plans 

by EPA Regional Offices. 

As long as states are applying their approved program 

regulations consistent with the minimum program elements 

established in 40 CFR 51.166, EPA does not believe it will 

be necessary to issue a SIP call for all states to address 

this issue. However, permitting authorities in SIPapproved states do not have the discretion to apply state 

laws in a manner that does not meet the minimum federal 

standards in 40 CFR 51.166, as interpreted and applied by 

EPA. Thus, if a state is not applying the PSD requirements 

to GHGs for the required sources after January 2, 2011, or 

lacks the legal authority to do so, EPA will exercise its 

oversight authority as appropriate to call for revisions to 

SIPs and to otherwise ensure sources do not commence 
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construction without permits that satisfy the minimum 

requirements of the federal PSD program. 

To enable EPA to assess the consistency of a state’s 

action with any PSD program requirements for GHGs, states 

should ensure that the record for each PSD permitting 

decision addresses whether the state has elected to follow 

EPA’s interpretation or believes it is appropriate to apply 

a different interpretation of state laws that is 

nonetheless consistent with the requirements of EPA’s PSD 

program regulations. In light of additional actions to be 

taken by EPA in the Tailoring Rule, states that issue 

permits in the near term may want to preserve the 

discretion to modify their approach after other EPA actions 

are finalized. In light of this contingency, one option 

states may consider is to establish that the state will not 

interpret its laws to require PSD permits for sources that 

are not required to obtain PSD permits under EPA 

regulations. 

VI. Application of the Title V Program to Sources of GHGs

Although the PSD Interpretive Memorandum and the 

October 7, 2009 reconsideration notice addressed only PSD 

permitting issues, EPA received several comments on the 

reconsideration notice that also addressed the application 

of Title V permitting requirements to GHGs. Most of these 
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comments urged EPA to apply the same approach for 

determining major source applicability for Title V

permitting that EPA applies to PSD. EPA has in fact been 

following the PSD approach in many respects. As with the 

PSD program, currently GHGs are not considered to be 

subject to regulation and have not been considered to 

trigger applicability under Title V. EPA discussed this in 

the preamble to the proposed Tailoring Rule as described 

below. 74 FR at 55300 n. 8. 

Title V requires, among other things, that any “major 

source” – defined, as relevant here, under CAA sections 

501(2)(b) and 302(j), as “any stationary facility or source 

of air pollutants which directly emits, or has the 

potential to emit, one hundred tons per year or more of any 

air pollutant...” – apply for a Title V permit. EPA 

interprets this requirement to apply to sources of 

pollutants “subject to regulation” under the Act. EPA 

previously articulated its interpretation that this Title V

permitting requirement applies to “pollutants subject to 

regulation” in a 1993 memorandum from EPA’s air program. 

Memorandum from Lydia N. Wegman, Deputy Director, Office of 

Air Quality Planning and Standards, U.S. EPA, “Definition 

of Regulated Air Pollutant for Purposes of Title V” (Apr. 

26, 1993) (Wegman Memorandum). EPA continues to maintain 
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this interpretation. The interpretation in this memorandum 

was based on: (1) EPA’s reading of the definitional chain 

for “major source” under Title V, including the definition 

of “air pollutant” under section 302(g) and the definition 

of “major source” under 302(j); (2) the view that Congress 

did not intend to require a variety of sources to obtain 

Title V permits if they are not otherwise regulated under 

the Act (see also CAA section 504(a), providing that Title 

V permits are to include and assure compliance with 

applicable requirements under the Act); and (3) consistency 

with the approach under the PSD program. While the 

specific narrow interpretation in the Wegman Memorandum of 

the definition of “air pollutant” in CAA section 302(g) is 

in question in light of Massachusetts (finding this 

definition to be “sweeping”), EPA believes the core 

rationale for its interpretation of the applicability of 

Title V remains sound. EPA continues to maintain its 

interpretation, consistent with CAA sections 302(j), 501, 

502 and 504(a), that the provisions governing Title V

applicability for “a major stationary source” can only be 

triggered by emissions of pollutants subject to regulation. 

This interpretation is based primarily on the purpose of 

Title V to include all regulatory requirements applicable 

to a source in one document and to assure compliance with 
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such requirements, see, e.g., CAA section 504(a), and on 

the desire to promote consistency with the approach under 

the PSD program.

In applying this interpretation under Title V, the 

Wegman Memorandum also explains that EPA does not consider 

carbon dioxide to be a pollutant subject to regulation 

based on the monitoring and reporting requirements of 

section 821 of the Clean Air Act Amendments of 1990. As 

articulated in numerous orders issued by EPA in response to 

petitions to object to Title V permits, EPA views the Title 

V operating permits program as a vehicle for ensuring that 

air quality control requirements are appropriately applied 

to facility emission units and that compliance with these 

requirements is assured. See, e.g., In the Matter of Fort 

James Camas Mill (Dec. 22, 2000); In the Matter of Cash 

Creek Generation, LLC (Dec. 15, 2009). The Wegman 

Memorandum points out that section 821 involves reporting 

and study of emissions, but is not related to actual 

control of emissions. Since the reporting requirements of 

section 821 have no connection to existing air quality 

control requirements, it is appropriate not to treat them 

as making carbon dioxide “subject to regulation” for 

purposes of Title V. Cf. Section 504(b) (providing EPA
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authority to specify requirements for “monitoring and 

analysis of pollutants regulated under this Act.”).

EPA has not previously explicitly considered the 

question of when a pollutant becomes “subject to 

regulation” under this established interpretation of the 

Title V requirements.15 EPA received comments in this 

reconsideration proceeding specifically on the question of 

when a pollutant becomes subject to regulation for purposes 

of Title V. In light of these comments, and the decision 

to adopt a “takes effect” approach for PSD, EPA believes it 

is appropriate to address this issue for Title V with 

respect to GHG. 

We are mindful of the different purposes for the PSD 

and Title V programs under the statute. While PSD results 

in substantive control requirements as necessary to meet 

air quality goals, Title V is focused on identifying, 

collecting, and assuring compliance with other Act 

requirements (including PSD), and generally does not itself 

 

15 We note that the preamble to the Proposed GHG Tailoring 

Rule implicitly assumed that a pollutant will become 

“subject to regulation” for PSD and Title V at the same 

time (and, in one case, suggests that time will be on 

promulgation of the LDV Rule). The latter statement was 

based on the interpretation in current PSD Interpretive 

Memorandum, but failed to note that we had proposed to 

change that interpretation in the October 7 Reconsideration 

notice (signed the same day as the Proposed GHG Tailoring 

Rule). See 74 FR at 55300 and 55340-41. 
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result in new control requirements. Nevertheless, as 

reflected in the Wegman Memorandum, the two programs have 

historically followed the same approach for determining 

when a pollutant is “subject to regulation.”16 We believe 

that a “takes effect” approach to the triggering of new 

pollutants is desirable and appropriate for Title V, for 

many of the reasons described above for PSD. We are 

therefore generally inclined to follow the approach adopted 

today for PSD, and conclude that GHGs are “subject to 

regulation,” for purposes of determining whether a source 

of GHGs is a “major source” for Title V, no earlier than 

the date on which a control requirement for GHGs “takes 

effect.” EPA currently anticipates that the LDV rule will 

be the first control requirement for GHGs to take effect. 

Under this approach, as with PSD, if the LDV rule takes 

effect as of January 2, 2011, a source that is not 

currently subject to Title V for its GHG emissions could 

become so no earlier than January 2, 2011.17 

Finally, we note that, as with PSD, we expect that, 

beyond January 2, 2011, there will remain significant 

administrative and programmatic considerations associated 

 

16 Wegman Memorandum at 5.

17 EPA notes that this date is also when we expect the first 

GHG control program addressing stationary sources will be 

in place under the Act (i.e., the PSD program). 
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with permitting of GHGs under Title V. In light of this, 

as discussed above with regard to PSD permitting, EPA will 

be further addressing in the final Tailoring Rule (to be 

promulgated in the near future) the manner in which sources 

can become subject to Title V as a result of their GHG 

emissions. 

VII. Statutory Authority

The statutory authority for this action is provided by 

section 553 of the Administrative Procedure Act (5 U.S.C. 

553) and sections 101, 165, 169, 301, and 307(d) of the CAA 

as amended (42 U.S.C. 7401, 7475, 7479, 7601 and 7607).
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Page 116 of 116 - Prevention of Significant Deterioration 

(PSD): Reconsideration of Interpretation of Regulations 

that Determine Pollutants Covered by the Federal PSD Permit 

Program

List of Subjects in 40 CFR Part 52

Environmental protection, Administrative practice and 

procedure, Air pollution control, Subject to regulation, 

Intergovernmental relations, Prevention of significant 

deterioration, Reporting and recordkeeping requirements.

_______________________________

Dated:

_______________________________

Lisa P. Jackson,

Administrator.